Eastern District of New York
Press releases recorded for this federal judicial district.
Alto rango de la MS-13 fugitivo es arrestado por cargos de terrorismoRead the Press Release
Al final de una audiencia de traslación, un tribunal federal en Houston, Texas ordenó que Elmer Canales-Rivera, alias Crook de Hollywood, un líder de alto rango de La Mara Salvatrucha, alias MS-13, fuera trasladado bajo custodia al Distrito Este de Nueva York, donde él y otros 13 líderes de alto rango de la MS-13 fueron acusados formalmente en diciembre de 2020 por delitos de terrorismo relacionados con su conducción de las actividades delictivas de la organización de criminalidad transnacional en Estados Unidos, El Salvador, México, México y en otros lugares durante las últimas dos décadas.
El 9 de noviembre, Canales-Rivera fue arrestado por miembros del FBI, Investigaciones de Seguridad Nacional (HSI) y el Servicio de Alguaciles de los Estados Unidos (USMS) al llegar al Aeropuerto Intercontinental George Bush en Houston, Texas. Concretamente, Canales-Rivera ha sido acusado de conspiración para prestar y ocultar apoyo material a terroristas, conspiración para cometer actos de terrorismo que trascienden las fronteras nacionales, conspiración para financiar el terrorismo y conspiración narcoterrorista.
“Sostenemos que a Elmer Canales-Rivera, miembro fundador de los ‘Doce Apóstoles del Diablo’ de la MS-13, le cabe responsabilidad por las acciones de la pandilla a lo largo de varias décadas para aterrorizar a las comunidades, atacar a las fuerzas del orden y sembrar la violencia aquí en Estados Unidos y en el extranjero”, expresó el fiscal general Merrick B. Garland. “La detención de esta persona, que es un alto líder desde hace tiempo en la MS-13, debería servir de advertencia a otros líderes de la MS-13 para entender que el Departamento de Justicia los hará responder por sus crímenes”.
“Este arresto deja claro que no hay ningún escondite seguro para los cabecillas de consorcios delictivos que amenazan a nuestras comunidades”, apuntó el secretario de Seguridad Nacional Alejandro N. Mayorkas. “Con la dedicación y las aptitudes de investigación de los agentes de HSI y nuestros socios en el ámbito federal, estamos enfrentando a organizaciones delictivas como la MS-13 y contribuyendo a llevar ante la justicia a todos aquellos que cometen delitos transnacionales”.
“Con determinación y actuación coordinada, el FBI y nuestras fuerzas de seguridad y socios extranjeros lograron capturar a un criminal violento que amenazaba de manera directa la seguridad de nuestras comunidades”, señaló el director del FBI, Christopher A. Wray. “Este esfuerzo ejemplifica el compromiso del FBI de salvaguardar al público estadounidense y la promesa continua de desarticular a las redes criminales como la MS-13”.
“La comparecencia del acusado en el día de hoy ante un tribunal federal en Estados Unidos es un paso inmenso en el proceso para que rinda cuentas por su papel clave como presunto miembro del órgano de liderazgo de la pandilla MS-13, conocido como los ‘Doce Apóstoles del Diablo’, y posteriormente renombrado Ranfla Nacional”, expresó el fiscal estadounidense Breon Peace para el Distrito Este de Nueva York. “Conforme se sostuvo, Canales-Rivera y sus coacusados actuaron como un directorio, disponiendo que se cometieran actos de violencia e intimidación y se prestara apoyo material a terroristas en El Salvador y en todo Estados Unidos, incluido el Distrito Este de Nueva York, donde en breve comparecerá ante un juzgado federal en Central Islip para responder por estos cargos”.
Según se establece en la acusación formal, que se pronunció el 16 de diciembre de 2020 y se reveló el 14 de enero de 2021, Canales-Rivera y sus coacusados forman parte de la estructura de mando y control de la MS-13, que está conformada por la Ranfla Nacional, Ranfla en Las Calles y Ranfla en Los Penales. Desempeñan papeles importantes de liderazgo en las operaciones de la organización en El Salvador, México, Estados Unidos y en todo el mundo. En total, 27 de los máximos líderes de la MS-13 han sido acusados en el Distrito Este de Nueva York en esta acusación formal y en la acusación conexa en la causa Estados Unidos v. Arevalo-Chávez et al.
Se sostiene asimismo que, aproximadamente en 2002, Canales-Rivera, sus coacusados y otros líderes de la MS-13 empezaron a establecer una estructura jerárquica de mando y control sumamente organizada como medio para ejecutar sus decisiones y hacer cumplir sus órdenes, incluso mientras se encontraban en prisión. Ordenaron que se cometieran hechos de violencia y homicidios en El Salvador, Estados Unidos y otros lugares, establecieron campamentos de entrenamiento de estilo militar para sus miembros y obtuvieron armas militares como fusiles, pistolas, granadas, artefactos explosivos improvisados y lanzacohetes. Además, a partir de aproximadamente 2012, Canales-Rivera y otros miembros de la Ranfla Nacional mantuvieron negociaciones con funcionarios gubernamentales de El Salvador y obtuvieron beneficios y concesiones del Gobierno de El Salvador. Con el fin de obtener esos beneficios y concesiones del Gobierno de El Salvador, la MS-13 llevó a cabo manifestaciones públicas de violencia para amenazar e intimidar a la población civil, atacó a agentes de la fuerza pública y militares del Gobierno de El Salvador y manipuló el proceso electoral en El Salvador. Canales-Rivera tuvo uno de los papeles más prevalentes en las negociaciones y acuerdos de la MS-13 con el Gobierno de El Salvador.
A su vez, como se alega, la Ranfla Nacional dirigió la expansión de las actividades de la MS-13 en todo el mundo, incluidos Estados Unidos y México, adonde se envió a varios altos líderes a organizar operaciones, entablar contactos para obtener narcóticos y armas de fuego de carteles mexicanos de narcotráfico como los Zetas, el Cártel del Golfo, el Cártel de Jalisco Nueva Generación (CJNG) y el Cártel de Sinaloa, y participar en trata y contrabando de personas. La Ranfla Nacional también ordenó a los numerosos miembros de la MS-13 en Estados Unidos que se involucren en actividades delictivas, como tráfico de drogas y extorsión, con el fin de recaudar dinero para apoyar las actividades terroristas de la MS-13 en El Salvador y en otros lugares.
Por último, la Ranfla Nacional y la estructura de liderazgo transnacional de la MS-13 habrían ordenado a miembros en Estados Unidos que cometieran actos de violencia, incluidos homicidios, para conseguir sus objetivos e implementar reglas que posibilitaron que la MS-13 se afianzara en partes de Estados Unidos, incluso dentro del Distrito Este de Nueva York, donde, bajo el liderazgo y las reglas de los acusados, la MS-13 ha perpetrado numerosos actos de violencia, como homicidios, tentativas de homicidio, agresiones, secuestros, tráfico de drogas y extorsión de personas y empresas, ha obstruido la justicia y ha enviado contribuciones y el producto de actividades delictivas mediante transferencias electrónicas a líderes de la MS-13 en El Salvador. Por ejemplo, la Fiscalía Federal para la División Criminal de Long Island del Distrito Este de Nueva York ha procesado a cientos de líderes, miembros y asociados de la MS-13 por cometer más de 65 homicidios en el Distrito Este de Nueva York entre 2009 y hasta el momento.
Cuando se dio a conocer la acusación en enero de 2021, Canales-Rivera se encontraba detenido en El Salvador cumpliendo una pena de prisión, y Estados Unidos presentó una circular roja de INTERPOL y una solicitud de extradición de Canales-Rivera al Gobierno de El Salvador. Sin embargo, aproximadamente en noviembre de 2021, Canales-Rivera fue liberado de la custodia del Gobierno de El Salvador y más tarde ingresó ilegalmente en Guatemala. Canales-Rivera permaneció prófugo hasta el 7 de noviembre, cuando fue detenido por las autoridades mexicanas.
Además de solicitar la extradición de Canales-Rivera, en 2021 y 2022, Estados Unidos solicitó la extradición de 11 de sus coacusados, incluido Borromeo Enrique Henríquez, también conocido como “Diablito de Hollywood”, quien es ampliamente reconocido como el integrante más poderoso de la Ranfla Nacional. Hasta la fecha, el Gobierno de El Salvador no ha extraditado a ninguno de esos acusados.
Dos de las otras personas acusadas junto con Canales-Rivera —Fredy Ivan Jandres-Parada, alias Lucky de Park View y Lacky de Park View, y César Humberto López-Larios, alias El Grenas de Stoners y Oso de Stoners— y tres acusados que figuran en la acusación de Arevalo-Chávez —Jorge Alexander De La Cruz, alias Cruger de Peatonales; Juan Antonio Martínez-Abrego, alias Mary Jane de Hollywood, y Francisco Javier Román-Bardales, alias Veterano de Tribus— siguen prófugos. Se recomienda enfáticamente al público que tenga información sobre su paradero que se comunique con la línea gratuita del FBI para denuncias sobre la MS-13, 1-866-STP-MS13 (1-866-787-6713), o la línea de denuncias de HSI llamando al 866-347-2423 o a través de www.ice.gov/webform/ice-tip-form
Juntos, el FBI y HSI han ofrecido una recompensa de USD 20.000 a cambio de información que posibilite el arresto y la condena de los fugitivos.
Este caso fue presentado por la Fuerza Operativa Conjunta Vulcan (Joint Task Force Vulcan, JTFV), creada para combatir a la MS-13, dirigida por el fiscal federal adjunto John J. Durham del Distrito Este de Nueva York, e integrada por Fiscalías Federales en todo el país, incluido el Distrito de Nueva Jersey; el Distrito Norte de Ohio; el Distrito de Utah; el Distrito de Massachusetts; el Distrito Este de Texas; el Distrito Sur de Nueva York; el Distrito Sur de Florida; el Distrito Este de Virginia; el Distrito Sur de California; el Distrito de Nevada; el Distrito de Alaska; y el Distrito de Columbia, así como otras agencias y oficinas gubernamentales que han sido socios clave en la JTFV, incluida la División de Seguridad Nacional del Departamento de Justicia y la División Criminal del FBI; Investigaciones de Seguridad Nacional (HSI); la Administración para el Control de Drogas de Estados Unidos (DEA); la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos (ATF); el USMS; la Oficina Federal de Prisiones (FBOP); y la Oficina del Inspector General de la Agencia de Estados Unidos para el Desarrollo Internacional.
La Oficina de Campo del FBI en Los Ángeles encabezó las investigaciones de la JTFV sobre los cabecillas de la MS-13, con el apoyo crítico prestado por la Unidad de Pandillas Safe Streets de la División de Investigaciones Penales, junto con la Unidad Nacional de Pandillas y Delitos Violentos de HSI y las Oficinas de Campo de HSI en Nueva York y Houston. A su vez, los agregados legales del FBI en Ciudad de México y San Salvador, la Oficina de Campo del FBI en Houston, el Agregado de HSI en Ciudad de México, el Agregado Legal del USMS en la Ciudad de México y los agentes del Servicio de Aduanas y Protección Fronteriza de Estados Unidos en el Aeropuerto Intercontinental George Bush en Houston prestaron apoyo crítico para el arresto, así como la Fiscalía Federal y el USMS para el Distrito Sur de Texas para coordinar la audiencia inicial en Houston.
Fueron varios los componentes del Departamento de Justicia que contribuyeron a esta acusación, incluidas la Sección Antiterrorista de la División de Seguridad Nacional; la Oficina Ejecutiva de las Fuerzas Operativas sobre la delincuencia organizada y la represión en materia de drogas (OCDETF); la Oficina de Asuntos Internacionales del Departamento de Justicia; y la Oficina de Desarrollo, Asistencia y Capacitación del Ministerio Público en el Extranjero de la División Penal. Además, la Oficina de Asuntos Internacionales de Narcóticos y Aplicación de la Ley del Departamento de Estado de EE. UU. y la Oficina de Control de Activos Extranjeros (Office of Foreign Assets Control, OFAC) del Departamento del Tesoro de EE. UU. han proporcionado asistencia valiosa para la misión de la JTFV.
De ser condenado, Canales-Rivera se enfrenta una pena máxima de prisión perpetua.
La acción penal es impulsada por los fiscales federales adjuntos John J. Durham, Paul G. Scotti, Justina L. Geraci, y Megan E. Farrell, de la División Penal de Long Island del Distrito Este de Nueva York, con la asistencia de los fiscales federales adjuntos James Donnelly del Distrito de Nueva Jersey, Matthew Shepherd del Distrito Norte de Ohio y Stewart Young del Distrito de Utah de la JTFV.
Una acusación implica solamente un señalamiento. Todos los acusados se presumen inocentes hasta tanto se demuestre su culpabilidad sin lugar a duda razonable en un tribunal de justicia.
Nonfungible Token (NFT) Developer Pleads Guilty to an International Scheme to Defraud NFT PurchasersRead the Press Release
Earlier today, Aurelien Michel, a French national who had been residing in the United Arab Emirates (UAE), pled guilty at the federal courthouse in Brooklyn, New York to conspiring to commit wire fraud in connection with defrauding purchasers of “Mutant Ape Planet” NFTs, a type of digital asset. Today’s proceeding took place before United States Magistrate Judge Vera M. Scanlon. When sentenced, Michel faces up to five years in prison. Michel has also agreed to pay $1.4 million in forfeiture. Michel was charged in January 2023.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York and Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced the guilty plea.
“With today’s guilty plea, Michel has admitted that he conspired with others to defraud consumers eager to participate in a new digital asset market,” stated United States Attorney Breon Peace. “Our Office is acutely aware that criminal actors are taking advantage of the constant pace of innovation in the digital asset space and the investing public’s desire to become involved in cryptocurrency to perpetrate large-scale frauds. Holding these criminal actors accountable and protecting the public is, and will remain, a priority of this Office.”
Mr. Peace expressed his appreciation to the New York Police Department, U.S. Customs and Border Protection, the U.S. Postal Inspection Service, Port Authority of New York and New Jersey Police, and Nassau County Sheriff’s Department.
“Aurelien Michel enticed investors with promises of capitalizing on the NFT trend, only to abandon the project after amassing nearly $3 million in what’s described as a ‘rug-pull scheme.’ The defendant, accused of misleading the Mutant Ape NFT community, claimed innocence and even labeled victims as ‘too toxic.’ However, these attempts to evade responsibility came to a conclusion with today’s plea,” stated Ivan J. Arvelo, Special Agent in Charge of HSI New York. “In the face of evolving investment landscapes, HSI remains vigilant, utilizing cutting-edge tools to safeguard individuals from unscrupulous actors and their attempts to exploit well-meaning investors.”
“While Michel purported to sell dream NFTs backed with rewards and benefits, he defrauded investors, turning their dream into a nightmare of deception and losses. There is no excusing this kind of greed, and today’s guilty plea brings Michel one step closer to realizing his own nightmare—behind bars,” said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York.
According to court filings and facts presented during the plea proceeding, Michel and his co-conspirators marketed the NFTs to purchasers by falsely promising them numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. But Michel and his co-conspirators intentionally failed to deliver on these promises, diverting millions of dollars’ worth of proceeds for their personal benefit while continuing to represent that the benefits would be forthcoming.
The government’s case is being prosecuted by Assistant United States Attorneys Drew G. Rolle and Dylan A. Stern of the Office’s Business and Securities Fraud Section with assistance from Paralegal Specialist William Daniels.
If you believe that you have been a victim of this crime, please call the HSI Tip Line at 1-866-347-2423.
The Defendant:
AURELIEN MICHEL
Age: 25
Dubai, United Arab EmiratesE.D.N.Y. Docket No. 23-CR-418 (MKB)
Congressional Campaign Staffer Pleads Guilty to Wire FraudRead the Press Release
CENTRAL ISLIP, NY – Earlier today, Samuel Miele pleaded guilty at the federal courthouse in Central Islip to wire fraud committed while he was working as a fundraiser for a candidate seeking election to the U.S. House of Representatives (Candidate #1). Miele agreed to pay $109,171 in restitution, $69,136 in forfeiture, and a separate stipulated payment of $470,000 to a contributor. The proceeding was held before United States District Judge Joanna Seybert.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Acting Assistant Attorney General of the Justice Department’s Criminal Division, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Anne T. Donnelly, District Attorney, Nassau County, announced the guilty plea.
"The defendant used fraud and deceit to steal more than one hundred thousand dollars from his victims, funneling this money into the campaign committees of candidates for the House, and into his own pockets,” stated United States Attorney Peace. “Defrauding potential political contributors undermines our democracy, and we will vigorously prosecute such conduct.”
“Today, Samuel Miele admitted to engaging in multiple frauds designed to improperly raise election campaign funds and for his own personal benefit. Miele now rightly faces punishment in the criminal justice system for his criminal acts. The FBI is committed to enforcing the laws that protect the integrity of electoral process – the hallmark of our democracy,” stated FBI Assistant Director-in-Charge Smith.
“This defendant misrepresented himself as a high-ranking congressional aide to deceived political donors and used their money to pad his own pocket and the coffers of a candidate,” District Attorney Donnelly stated. “The integrity of fundraising practices is essential for fair elections. We stand alongside our federal partners to protect our electoral institutions and are proud to assist in this prosecution.”
As part of the scheme, Miele impersonated a high-ranking aide to a member of House leadership while soliciting funds for Candidate #1’s campaign. As part of his plea, Miele also admitted that he committed access device fraud by charging credit cards without authorization for contributions to the campaigns of Candidate #1 and other candidates, as well as for Miele’s personal use. When sentenced, he faces up to 20 years in prison.
The FBI is investigating the case with assistance from the Nassau County District Attorney’s Office.The government’s case is being prosecuted by the Office’s Public Integrity Section and Long Island Criminal Division, and the Criminal Division’s Public Integrity Section. Assistant United States Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise, along with Trial Attorneys John Taddei and Jacob Steiner are in charge of the prosecution, with assistance from Paralegal Specialist Rachel Friedman.
The Defendant:
SAMUEL MIELE
Age: 27
New York, NYE.D.N.Y. Docket No. 23-CR-327 (JS)
Congressional Campaign Staffer Pleads Guilty to Wire FraudRead the Press Release
A congressional campaign staffer pleaded guilty today to wire fraud in connection with a scheme to fraudulently obtain political contributions.
According to court documents, Samuel Miele, 27, of New York, worked as a fundraiser for a candidate seeking election to the U.S. House of Representatives (Candidate #1). As part of the scheme, Miele impersonated a high-ranking aide to a member of House leadership while soliciting funds for Candidate #1’s campaign. Miele also admitted that he committed access device fraud by charging credit cards without authorization for contributions to Candidate #1’s and other candidates’ campaigns, as well as for Miele’s personal use.
Miele is scheduled to be sentenced on April 30, 2024, and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.
The FBI is investigating the case, with assistance from the Nassau County District Attorney’s Office.
Trial Attorneys Jacob Steiner and John Taddei of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise for the Eastern District of New York are prosecuting the case, with assistance from Paralegal Specialist Rachel Friedman.
Long Island Man Pleads Guilty to Conspiring to Distribute Fentanyl That Contributed to Two Overdose DeathsRead the Press Release
Earlier today, in federal court in Central Islip, Charles Carter, also known as “Chase,” pleaded guilty to conspiring to distribute more than 40 grams of fentanyl. As part of his plea, Carter admitted that fentanyl that he sold contributed to the drug overdose deaths of two victims (“Victim-1” and “Victim-2”) in 2020 and 2021. Carter also admitted that in, 2021, he sold more than 43 grams of fentanyl to an undercover officer. The plea proceeding was held before United States District Gary R. Brown. As part of his plea agreement, Carter forfeited approximately $3,200 in seized narcotics sales proceeds and a 2009 Jeep Patriot that he used to facilitate narcotics sales. When sentenced, Carter faces five to 40 years’ imprisonment.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Patrick J. Ryder, Commissioner of the Nassau County Police Department (NCPD), and, William Whitton, Chief of Police, Glen Cove Police Department (GCPD), announced the guilty plea.
“Carter’s fentanyl sales contributed to the overdose deaths of a man and a woman, which only added to pain and anguish caused by an opioid epidemic that has harmed so many on Long Island,” stated United States Attorney Peace. “The defendant’s guilty plea today is the result of the relentless efforts by this Office and our law enforcement partners to prosecute traffickers dealing lethal drugs for profit and bring justice for the victims and families devastated by the scourge of fentanyl.”
“During the COVID pandemic, when the world was focused on saving lives and the public’s health, Carter was making plans to sell ‘the good stuff’ which ended lives and fueled the fentanyl crisis. This plea exemplifies law enforcement’s efforts to bring to justice those causing the most harm to our communities,” stated DEA Special Agent-in-Charge Tarentino.
“Defendant Carter knowingly sold narcotics laced with fentanyl for months which contributed to the premature deaths of a man and woman. With this plea, the defendant will receive a sentence that fits this crime. All of this would not be possible without the exemplary work from numerous law enforcement agencies and their investigators,” stated NCPD Commissioner Ryder.
“With drug overdoses rising at an alarming rate the Glen Cove Police Department will continue to make it a priority to identify and arrest those selling drugs in our community,” stated GCPD Chief of Police Whitton.
Between August 2020 and February 2021, Carter sold more than 40 grams of fentanyl to two overdose victims and an undercover GCPD detective. The investigation revealed that on August 6, 2020, a 23-year-old individual (Victim-1) died of a drug-related overdose at her residence in Glen Cove, Long Island. Cellular telephone analysis and additional investigation, showed that the fentanyl that Victim-1 used was purchased from Carter about two days before Victim-1’s death and that Victim-1 had drug-sale-related communications with Carter. On February 5, 2021, a 40-year-old individual (Victim-2) died of a drug-related overdose at his residence in Farmingdale, Long Island. A search of Victim-2’s phone revealed text messages between Carter and Victim-2, which related to Victim-2’s purchase of fentanyl, shortly before and in the months preceding his overdose death. For example, on January 21, 2021, Carter wrote text messages to Victim-2, stating “im.(sic) around and I got the good stuff[.] Do u (sic) need to see me..??” Autopsies performed on both victims revealed traces of fentanyl in their bodies. Additionally, Carter repeatedly sold fentanyl to the undercover GCPD detective in doses that could have been lethal if consumed, including approximately 43 grams of fentanyl in January 2021.
According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2019, nearly 71,000 people died from drug overdoses, making it a leading cause of injury-related death in the United States. The increase in overdose deaths has been driven in large part by fentanyl, a drug that has been described as 50 to 100 times more potent than morphine. In 2019, over 14,000 people died in the United States from a drug overdose involving heroin. From 2013 to 2019, the synthetic opioid death rate increased by more than 1,000 percent. Of those deaths, over 70% involved a prescription or illicit opioid. Among New York State residents, the number of overdose deaths involving any opioid increased each year between 2010 and 2017, with an overall increase of 200.2 percent from 1,074 in 2010 to 3,224 in 2017, according to the New York State Health Department.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution, with assistance from Paralegal Specialist Samantha Schroder and Legal Assistant Janelle Robinson.
The Defendant:
CHARLES CARTER (also known as “Chase”)
Age: 34
Amityville, New YorkE.D.N.Y. Docket No. 21-CR-88 (S-1) (GRB)
Warga Negara Indonesia Diekstradisi Dari Singapura Untuk Menghadapi Tuntutan Karena Melakukan Skema Ponzi Yang Menargetkan Komunitas Indonesia Dan Indo-AmerikaRead the Press Release
Di pengadilan federal di Brooklyn, Dakwaan 16 dakwaan dan 16 dakwaan pengganti telah dibuka segelnyadalam penuntutan warga negara Indonesia bernama Francius Marganda yang melakukan penipuan sekuritas, penipuan kawat, pencucian uang dan tuduhan konspirasi terkait karena melakukan skema Ponzi dari bulan Mei 2019 hingga Mei 2021 yang menargetkan ratusan korban investor yang menetap di lebih dari 12 negara bagian termasuk New York dan di Indonesia. Marganda diekstradisi ke Distrik Timur New York dari Signapore kemarin dan akan diadili pada 13 November 2023 di hadapan Hakim Ketua Amerika Serikat Lois Bloom.
Breon Peace, Pengacara Amerika Serikat untuk Distrik Timur New York; James Smith, Asisten Direktur Penanggung Jawab, Federal Bureau of Investigation (Biro Investigasi Federal), Kantor Lapangan New York (FBI); dan Ivan J. Arvelo, Agen Khusus Penanggung Jawab, U.S. Department of Homeland Security (Departemen Keamanan Dalam Negeri AS), Investigasi Keamanan Dalam Negeri (HSI), mengumumkan ekstradisi dan gugatannya.
“Ratusan korban menitipkan uang hasil jerih payah mereka kepada rekan senegaranya dari Indonesia yang ternyata adalah penipu yang jahat. Marganda mengkhianati kepercayaan mereka dengan menggunakan skema Ponzi klasik untuk menipu mereka hingga jutaan dolar untuk keuntungan pribadinya,” kata Peace, Pengacara Amerika Serikat. “Kantor ini berkomitmen untuk melindungi masyarakat investor dari pemangsa seperti Marganda dan akan bekerja sama dengan mitra penegak hukum kami untuk membawa para penjahat ini ke keadilan di mana pun mereka berada.”
Mr. Peace berterima kasih kepada Office of International Affairs (Kantor Hubungan Internasional) di Departemen Kehakiman, khususnya Atase DOJ yang berbasis di Manila dan Bangkok; mitra penegakan hukum di U.S. Embassy (Kedutaan Besar AS) di Singapura, termasuk Atase Hukum FBI, Atase HSI, dan U.S. Department of State’s Diplomatic Security Service Overseas Criminal Investigations office (Kantor Investigasi Kriminal Luar Negeri Layanan Keamanan Diplomatik di Departemen Luar Negeri AS); dan para pihak berwenang di Singapura, khususnya Kepolisian Singapura dan Attorney-General’s Chambers (Dewan Kejaksaan Agung), atas bantuan mereka dalam penangkapan dan ekstradisi Marganda. Mr. Peace juga berterima kasih kepada Securities and Exchange Commission, Fort Worth Regional Office (Komisi Sekuritas dan Bursa, Kantor Regional di Fort Worth); United States Attorney’s Office for the Southern District of New York (Kantor Kejaksaan Amerika Serikat untuk Distrik Selatan New York); Internal Revenue Service Criminal Investigation (Investigasi Kriminal Dinas Pendapatan Internal), New York; Federal Trade Commission (Komisi Perdagangan Federal); New York State Attorney General’s Office (Kantor Kejaksaan Agung Negara Bagian New York); Commonwealth of Massachusetts Attorney General’s Office (Kantor Kejaksaan Agung Persemakmuran Massachusetts); New York County District Attorney’s Office (Kantor Kejaksaan Wilayah New York); Queens County District Attorney’s Office (Kantor Kejaksaan Wilayah Queens); New York City Police Department (Departemen Kepolisian Kota New York); Westford Police Department (Departemen Kepolisian Westford), di Westford, Massachusetts; Richfield Police Department (Departemen Kepolisian Richfield), di Richfield, Minnesota; dan Lexington Police Department (Departemen Kepolisian Lexington), di Lexington, Carolina Selatan, atas bantuan mereka dalam penyelidikan ini.
“Marganda diduga memangsa rekan-rekan ekspatriat dan senegaranya untuk menipu uang mereka. Terdakwa membujuk korbannya dengan janji pengembalian investasi yang luar biasa, sebuah godaan yang terbukti berhasil dalam skema Ponzi. Sebaliknya, uang korban tersebut digunakan untuk membiayai gaya hidup mewah si terdakwa. FBI dan mitra penegak hukum kami berdedikasi untuk melindungi masyarakat dari penipuan dan meyakinkan bahwa bagi mereka yang melanjutkan tipe skema seperti ini akan menghadapi konsekuensi atas perbuatan mereka,” ujar Asisten Direktur Penanggung Jawab dari FBI yang bernama Smith.
“Seperti yang dituduhkan, Marganda dan rekan-rekan konspiratornya memangsa komunitas Indonesia dan Indo-Amerika, menjanjikan tingkat pengembalian yang tampaknya terlalu bagus untuk menjadi kenyataan hingga skema Ponzi mereka runtuh, sehingga investor kehilangan tabungan dengan jumlah jutaan dolar yang telah mereka peroleh dengan susah payah,” ujar Agen Khusus HIS Arvelo. “HSI bangga bisa bekerja sama dengan mitra kami di dalam dan luar negeri, dengan memanfaatkan jejak internasional kami untuk melindungi korban yang tidak bersalah dari skema pemangsa dan membawa para pelaku ke keadilan.
Marganda memiliki dan mengoperasikan Air Travel Ticketing Corp., sebuah perusahaan tiket pesawat diskon di New York, dan mengoperasikan MH Lux & Beauty Inc., sebuah perusahaan barang mewah yang terdaftar di California. Seperti yang dituduhkan di dalam dakwaan, dari bulan Mei 2019 hingga Mei 2021, Marganda dan rekan-rekan konspiratornya menjalankan skema untuk menipu para investor dengan cara meminta investasi dalam dua program palsu, yaitu Easy Transfer dan Global Transfer —yang mana Marganda dan rekan-rekan konspiratornya menggambarkan secara palsu sebagai program pinjaman jangka pendek dengan bunga tinggi di mana para investor akan memperoleh pendapatan pasif. Ratusan investor, banyak dari mereka adalah pelanggan dari perusahaan Air Travel milik terdakwa, sebagian besar berasal dari komunitas Indonesia dan Indo-Amerika, dan mereka menginvestasikan lebih dari 23 juta dolar ke dalam Easy Transfer dan Global Transfer. Banyak dari korban-korban ini mempunyai keuangan yang terbatas dan mengumpulkan sumber daya mereka dari kerabat dan teman-teman untuk melakukan investasi.
Dalam surat-surat berisi perjanjian palsu yang dibagikan kepada korban investor, peserta skema menjanjikan tingkat pengembalian yang tinggi – seringkali setinggi 200% atau lebih – pada simpanan investor.
Saat skema Ponzi berlanjut, Marganda dan rekan-rekan konspiratornya mengarahkan para investor untuk melakukan pembayaran tunai dan untuk menyetorkan dana ke dalam rekening bank mereka dan ke rekening investor-investor lain. Marganda dan rekan-rekan konspiratornya menyalahgunakan dana tersebut untuk kepentingan mereka sendiri, termasuk dengan membeli perumahan dan barang-barang mewah. Marganda dan rekan-rekan konspiratornya juga mencuci uang terkait dengan skema tersebut ke dalam rekening bank yang berlokasi di Distrik Timur kota New York dan di Indonesia. Skema Ponzi tersebut akhirnya gagal di bulan Mei 2021, ketika Marganda dan rekan-rekan konspiratornya berhenti melakukan pembayaran kepada para investor.
Tuduhan di dalam dakwaan adalah dugaan, dan Marganda dianggap tidak bersalah kecuali dan hingga terbukti bersalah. Jika terbukti bersalah, Marganda akan menghadapi hukuman penjara hingga 20 tahun untuk setiap tuduhan penipuan kawat, penipuan sekuritas, konspirasi penipuan kawat dan konspirasi pencucian uang dan untuk empat tuduhan pencucian uang; hingga 10 tahun penjara untuk dua tuduhan pencucian uang; dan hukuman penjara hingga lima tahun untuk tuduhan konspirasi penipuan sekuritas.
FBI dan HSI telah membentuk situs web dan hotline email untuk para calon korban. Jika Anda memiliki informasi mengenai tuduhan-tuduhan dalam dakwaan ini atau yakin bahwa Anda mungkin menjadi korban, silakan kirim email ke [email protected] atau www.fbi.gov/Marganda.
Pada bulan Juli 2022, Mr. Peace terpilih sebagai Ketua sub White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (komite Penipuan Kerah Putih untuk Dewan Pertimbangan Kejaksaan Agung) (AGAC). Sebagai pemimpin sub komite, Mr. Peace memainkan peran penting dalam membuat rekomendasi untuk AGAC untuk memfasilitasi pencegahan, penyelidikan dan penuntutan berbagai kejahatan tanpa kekerasan yang bermotif finansial, termasuk penipuan kawat, seperti penipuan yang telah dilakukan oleh Marganda.
Kasus pemerintah ini ditangani oleh Bagian Integritas Publik dari Kantor tersebut. Asisten Pengacara Amerika Serikat bernama Victor Zapana dan Laura Zuckerwise bertanggung jawab atas penuntutan tersebut, dengan bantuan dari Paralegal Spesialis Kavya Kannan.
Terdakwa:
FRANCIUS MARGANDA
Umur: 40
Jakarta, Indonesia dan sebelumnya dari Queens, New YorkE.D.N.Y. Docket No. 22-CR-481 (DLI)
Indonesian National Extradited from Singapore to Face Charges of Running Ponzi Scheme Targeting Indonesian and Indo-American CommunityRead the Press Release
A 16-count indictment and 16-count superseding indictment were unsealed in federal court in Brooklyn charging Indonesian national Francius Marganda with securities fraud, wire fraud, money laundering and related conspiracy counts for running a Ponzi scheme from May 2019 to May 2021 that targeted hundreds of victim investors residing in more than 12 states including New York and in Indonesia. Marganda was extradited to the Eastern District of New York from Singapore yesterday and will be arraigned on November 13, 2023 before United States Chief Magistrate Judge Lois Bloom.
Breon Peace, United States Attorney for the Eastern District of New York; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Ivan J. Arvelo, Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), announced the extradition and charges.
“Hundreds of victims entrusted their hard-earned money to a fellow countryman from Indonesia who turned out to be an unscrupulous fraudster. Marganda betrayed their trust by using a classic Ponzi scheme to defraud them out of millions of dollars for his own personal gain,” stated United States Attorney Peace. “This Office is committed to protecting the investing public from predators like Marganda and will work closely with our law enforcement partners to bring these criminals to justice regardless of where in the world they are located.”
Mr. Peace thanked the Justice Department’s Office of International Affairs, particularly the DOJ Attachés based in Manila and Bangkok; law enforcement partners at the U.S. Embassy in Singapore, including the FBI’s Legal Attaché, the HSI Attaché, and the U.S. Department of State’s Diplomatic Security Service Overseas Criminal Investigations office; and Singaporean authorities, particularly the Singapore Police Force and Attorney-General's Chambers, for their assistance with Marganda’s arrest and extradition. Mr. Peace also thanked the Securities and Exchange Commission, Fort Worth Regional Office; the United States Attorney’s Office for the Southern District of New York; the Internal Revenue Service Criminal Investigation, New York; the Federal Trade Commission; the New York State Attorney General’s Office; the Commonwealth of Massachusetts Attorney General’s Office; the New York County District Attorney’s Office; the Queens County District Attorney’s Office; the New York City Police Department; the Westford Police Department, Westford, Massachusetts; the Richfield Police Department, Richfield, Minnesota; and the Lexington Police Department, Lexington, South Carolina, for their assistance with the investigation.
“Marganda allegedly preyed on his fellow expatriates and countrymen in order to defraud them of their money. The defendant enticed his victims with promises of an extraordinary return on investment, a tried-and-true lure into a Ponzi Scheme. Instead, the victims’ money went to funding the defendant’s extravagant lifestyle. The FBI and our law enforcement partners are dedicated to protecting the public from scams and ensuring that those who perpetuate these types of schemes face the consequences for their actions,” stated FBI Assistant Director-in-Charge Smith.
“As alleged, Marganda and his co-conspirators preyed on the Indonesian and Indo-American community, promising rates of return that appeared too good to be true until their Ponzi scheme came crashing down, leaving investors out of their hard-earned savings to the tune of millions of dollars,” stated HSI Special Agent-in-Charge Arvelo. “HSI is proud to work with our partners at home and abroad, leveraging our international footprint to protect innocent victims from predatory schemes and bring the perpetrators to justice.”
Marganda owned and operated Air Travel Ticketing Corp., a discount airline tickets company in New York, and operated MH Lux & Beauty Inc., a purported luxury goods company registered in California. As alleged in the indictment, from May 2019 to May 2021, Marganda and his co-conspirators ran a scheme to defraud investors by soliciting investments in two sham programs called Easy Transfer and Global Transfer—which Marganda and his co-conspirators falsely represented were short-term, high-interest loan programs in which investors would earn passive income. Hundreds of investors, many of the defendant’s Air Travel customers, were predominantly from the Indonesian and Indo-American community, and they invested more than $23 million into Easy Transfer and Global Transfer. Many of the victims had limited means and had pooled their resources with relatives and friends to make investments.
In fraudulent agreement letters distributed to victim investors, the scheme participants promised high rates of return—often as high as 200% or more—on the investors’ deposits. As the Ponzi scheme continued, Marganda and his co-conspirators directed investors to make cash payments and to deposit funds into their bank accounts and the accounts of other investors. Marganda and his co-conspirators misappropriated the funds for their own benefit, including by buying real estate and luxury goods. Marganda and his co-conspirators also laundered scheme-related money into bank accounts located in the Eastern District of New York and in Indonesia. The Ponzi scheme ultimately collapsed in May 2021, when Marganda and his co-conspirators stopped making payments to investors.
The charges in the indictment are allegations, and Marganda is presumed innocent unless and until proven guilty. If convicted, Marganda faces up to 20 years’ imprisonment for each of the wire fraud, securities fraud, wire fraud conspiracy and money laundering conspiracy counts and for four of the money laundering counts; up to 10 years’ imprisonment for two of the money laundering counts; and up to five years’ imprisonment for the securities fraud conspiracy count.
The FBI and HSI have established a website and an e-mail hotline for potential victims. If you have information regarding the allegations in the indictment or believe that you may be a victim, please go to www.fbi.gov/Marganda or e-mail [email protected]
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including wire fraud, such as the fraud that Marganda committed.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Victor Zapana and Laura Zuckerwise are in charge of the prosecution, with assistance from Paralegal Specialist Kavya Kannan.
The Defendant:
FRANCIUS MARGANDA
Age: 40
Jakarta, Indonesia and formerly of Queens, New YorkE.D.N.Y. Docket No. 22-CR-481 (DLI)
South Carolina Man Sentenced to 50 Months in Prison for being a Felon in Possession of a Firearm in Connection with Gun Trafficking SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, United States District Judge Frederic Block sentenced Darrell Robinson to 50 months in prison for illegal gun possession, including an AR-15 style rifle, in connection with firearms trafficking scheme. Robinson pleaded guilty in April 2023 to being a felon in possession of a firearm.
Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“I have no doubt that lives may have been saved and tragedies averted by the seizure of these lethal weapons that were transported to our district from out-of-state by a convicted felon,” stated United States Attorney Peace. “Today’s sentence is validation of the tireless work of this Office and our law enforcement partners who are working to protect the community from gun violence.”
On August 8, 2022, law enforcement learned that Robinson would be traveling in a vehicle to the Willets Point section of Queens transporting firearms to sell. Acting pursuant to a judicially-issued search warrant, law enforcement agents stopped Robinson’s vehicle and found a bag containing multiple firearms. Recovered were a Smith & Wesson .380 caliber pistol, a Taurus 9 mm pistol, a Bersa .380 caliber pistol, a Springfield Armory 9 mm pistol, a Smith & Wesson 9 mm pistol and a Smith & Wesson .22 caliber rifle, an AR-15 style rifle.
Robinson has at least seven previous state felony convictions, including for armed robbery and aggravated assault.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. As part of the program, U.S. Attorney’s Offices work in partnership with federal, state, local, and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime. The U.S. Attorney’s Office for the Eastern District of New York is currently partnering with the SCPD, the New York City Police Department (NYPD), the Federal Bureau of Investigation (FBI), ATF, the U.S. Department of Homeland Security, Homeland Security Investigations (DHS/HSI), and the Drug Enforcement Administration (DEA) in its PSN mission.
The government’s case is being handled by the office’s General Crimes Section. Assistant United States Attorney Kaitlin McTague and Special Assistant United States Attorney Sean Fern are in charge of the prosecution.
The Defendant:
Darrell Robinson
Age: 30
Columbia, South CarolinaE.D.N.Y. Docket No. 22-CR-403 (FB)
Ten Members and Associates of the Gambino Crime Family Arrested in Coordinated U.S.-Italian TakedownRead the Press Release
A 16-count indictment was unsealed today in federal court in Brooklyn charging 10 defendants with racketeering conspiracy, extortion, witness retaliation, and union-related crimes committed in an attempt to dominate the New York carting and demolition industries. All ten defendants are in custody and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. In connection with the arrests, federal authorities executed search warrants, one of which resulted in the seizure of multiple firearms from an associate of the Gambino crime Family.
In a coordinated operation, Italian law enforcement today arrested six organized crime members and associates who are charged with, among other crimes, mafia association and connected criminal offenses. One individual remains at large.
The defendants are Joseph Lanni, also known as “Joe Brooklyn” and “Mommino,” an alleged captain in the Gambino organized crime family, Diego “Danny” Tantillo, Angelo Gradilone, also known as “Fifi,” and James LaForte, alleged Gambino soldiers, Vito Rappa, alleged U.S.-based Sicilian Mafia member and Gambino associate, Francesco Vicari, also known as “Uncle Ciccio,” alleged U.S.-based Sicilian Mafia associate and Gambino associate, and Salvatore DiLorenzo, Robert Brooke, Kyle Johnson, also known as “Twin,” and Vincent Minsquero, also known as “Vinny Slick,” alleged Gambino associates.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Jonathan Mellone, Special Agent-in-Charge, Northeast Region, U.S. Department of Labor, Office of Inspector General (DOL-OIG), Edward A. Caban, Commissioner, New York City Police Department (NYPD), and Elizabeth Crotty, Commissioner and Chair, New York City Business Integrity Commission (BIC), announced the charges.
“As alleged, for years, the defendants committed violent extortions, assaults, arson, witness retaliation and other crimes in an attempt to dominate the New York carting and demolition industries,” stated United States Attorney Breon Peace. “Today’s arrests reflect the commitment of this Office and our law enforcement partners, both here and abroad, to keep our communities safe by the complete dismantling of organized crime.”
Mr. Peace expressed his appreciation to the New York Waterfront Commission, the Office’s law enforcement partners in Italy, including the Prosecutor of Palermo, the Polizia di Stato, the Servizio Centrale Operativo, and the Squadra Mobile of Palermo.
“These defendants learned the hard way that the FBI is united with our law enforcement locally and internationally in our efforts to eradicate the insidious organized crime threat. Those arrested are alleged to have taken part in a racketeering conspiracy in an attempt to control the carting and demolition industries in the city. The FBI will continue to lead the fight against organized crime and ensure that individuals willing to cross the line face punishment in the criminal justice system” stated FBI Assistant Director-in-Charge Smith.
“Today’s arrests should serve as a warning to others who believe they can operate in plain sight with apparent impunity – the NYPD and our law enforcement partners exist to shatter that notion,” stated NYPD Commissioner Edward A. Caban. “And we will continue to take down members of traditional organized crime wherever they may operate.”
“An important part of the mission of the Office of Inspector General is to investigate allegations of fraud involving labor unions and their affiliated employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” said DOL-OIG Special Agent-in Charge Jonathan Mellone.
“Investigating these matters is at the heart of BIC’s mission to ensure the industries under our regulation do not pose a risk to public safety. These arrests demonstrate that the influence of organized crime will never go unchecked,” stated BIC Commissioner and Chair Elizabeth Crotty. “BIC thanks the NYPD, FBI, EDNY, and our other agency partners for their collaboration and excellent work on this case.”
As alleged in the government’s court filings and summarized below, members and associates of the Gambino crime family used violent extortions, fraud, theft and embezzlement schemes to infiltrate the carting and demolition industries to enrich themselves and the Gambino crime family, including by laundering criminal proceeds. For example, in the midst of a financial dispute between Tantillo and the owners of Demolition Company 1, Tantillo and Johnson coordinated a violent hammer assault on the dispatcher for Demolition Company 1, which left the dispatcher bleeding and seriously injured.
Extortions Related to the Carting and Demolition Industries
Tantillo, Rappa, Vicari and Johnson engaged in a violent extortion conspiracy relating to the demand and receipt of money from John Doe 1, who operated a carting business in the New York City area. The extortion scheme involved threatening John Doe 1 with a bat, setting fire to the steps to John Doe 1’s residence, attempting to damage John Doe 1’s carting trucks, and violently assaulting an associate of John Doe 1. In addition, Tantillo and Vicari were captured on judicially-authorized wiretaps discussing threats they made to John Doe 1 and John Doe 1’s father-in-law. On one call, Rappa stated that Vicari “acted like the ‘Last of the Samurai,” describing how Vicari picked up a knife and directed John Doe 1’s father-in-law to threaten to cut John Doe 1 in half in order to get John Doe 1 to make extortionate payments. After John Doe 1 ultimately made a payment of $4,000 to Vicari, Vicari and Rappa met and sent Tantillo a photo of Vicari raising a small champagne bottle, as in a toast.
In addition, Tantillo, Brooke and Johnson engaged in two separate violent extortion schemes of Demolition Company 1 and its owners over purported debts owed to Tantillo and a company operated by Tantillo and Brooke. Brooke violently assaulted one of the owners on a street corner in midtown Manhattan. In another instance, as mentioned, Tantillo and Johnson coordinated a violent hammer assault on a dispatcher at Demolition Company 1, which left the dispatcher bleeding and seriously injured. Pictures of the victim dispatcher were then circulated to various people in the carting and demolition industries.
Frauds and Union-Related Crimes in the Carting and Demolition Industries
The defendants also committed a series of crimes to steal and embezzle from unions and employee benefit plans and rigged bids in the demolition and carting industries. As part of one such scheme, DiLorenzo provided Rappa with a “no-show” job at DiLorenzo’s demolition company so that Rappa could receive paychecks and union health benefits, among other benefits. Similarly, Tantillo arranged for Gradilone to receive a “no-show” job at a construction company with which Tantillo was associated, which enabled Gradilone to receive paychecks and union health benefits to which he was not entitled. Tantillo and Johnson also conspired to secure a “no-show” job for Johnson, so that Johnson could similarly receive union health benefits.
Tantillo also embezzled from employee benefit plans by using laborers from a non-union company, Gane Services, Inc., to perform work for union companies operated by Tantillo, and failing to make contributions for such work as required by collective bargaining agreements.
In addition, Tantillo, DiLorenzo and their co-conspirators conspired to rig bids for lucrative demolition contracts in New York City. Among other things, Tantillo and DiLorenzo coordinated that their companies exchange bidding information to secure a project on Fifth Avenue.
Additional Charged Schemes
The defendants also perpetrated a series of other crimes throughout the New York and New Jersey areas from 2017 through 2023. Their pattern of racketeering activity included additional extortions, retaliating against a federal witness, and money laundering, among other crimes, as detailed in court documents. For example, in September 2023, Lanni and Minsquero coordinated an assault on proprietors of a restaurant in New Jersey, including physically assaulting a woman at knifepoint. In addition, LaForte, having previously been convicted of a felony, illegally possessed a firearm in or about May 2023.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. The defendants variously face maximum sentences between 20 and 180 years’ imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Matthew R. Galeotti, Anna L. Karamigios, and Andrew M. Roddin are in charge of the prosecution, with assistance from Paralegal Specialist Emme Moosher.
The Defendants:
JOSEPH LANNI (also known as “Joe Brooklyn” and “Mommino”)
Age: 52
Staten Island, New YorkDIEGO TANTILLO (also known as “Danny” and “Daniel”)
Age: 48
Freehold, New JerseyROBERT BROOKE
Age: 55
New York, New YorkSALVATORE DILORENZO
Age: 66
Oceanside, New YorkANGELO GRADILONE (also known as “Fifi”)
Age: 57
Staten Island, New YorkKYLE JOHNSON (also known as “Twin”)
Age: 46
Bronx, New YorkJAMES LAFORTE (also known as “Jimmy”)
Age: 46
New York, New YorkVINCENT MINSQUERO (also known as “Vinny Slick”)
Age: 36
Staten Island, New YorkVITO RAPPA (also known as “Vi”)
Age: 46
East Brunswick, New JerseyFRANCESCO VICARI (also known as “Frank” and “Uncle Ciccio”)
Age: 46
Elmont, New YorkE.D.N.Y. Docket No. 23-CR-443
Readout of Justice Department Leadership’s Meetings with Law Enforcement and Community LeadersRead the Press Release
This week, Justice Department leaders met with law enforcement and community leaders at a time of increased threats against Jewish, Muslim, and Arab communities across the country. The Department remains vigilant in combating threats against Americans based on their religion, race, color, ethnicity, or national origin.
“In this heightened threat environment, the partnerships between the Department of Justice, state and local law enforcement, and the communities we serve matter more than ever,” said Attorney General Merrick B. Garland. “That is why, this week, the Department held meetings with law enforcement and community leaders to discuss what they are seeing on the ground and how we can best support them. In these conversations, I reiterated that the Justice Department is committed to protecting our communities from hate-fueled violence. The Department will continue bringing together stakeholders to support our shared goal of preventing, disrupting, and prosecuting illegal acts of hate fueled by antisemitism, Islamophobia, or anti-Arab bias.”
Today, Attorney General Garland, Associate Attorney General Vanita Gupta, FBI Director Christopher Wray, Assistant Attorney General for Civil Rights Kristen Clarke, Acting Community Relations Service Director Justin Lock, and other Department officials met with Jewish community leaders in Washington, D.C. The leaders expressed their concerns about the significant increase in threats against Jewish community members, organizations, and businesses over the past month. Department officials discussed their continued commitment to protecting Jewish communities and highlighted recent examples of prosecutions against individuals for threatening or attempting to harm Jewish people across the country.
Also today, in Brooklyn, New York, Deputy Attorney General Lisa O. Monaco joined U.S. Attorney Breon Peace for the Eastern District of New York for a roundtable discussion with local Jewish leaders. Deputy Attorney General Monaco emphasized that the Justice Department’s top priority is keeping the American people safe, and that the Department will use every available tool to work with partners across the country to combat hate.
These meetings come as there has been a significant increase in the volume and frequency of threats against Jewish, Muslim, and Arab communities across the country. During the meetings, Department leadership stressed that no one in the United States should have to live in fear of violence because of where they or their family comes from or because of how they worship.
On Monday, Attorney General Garland and Associate Attorney General Gupta met with community leaders before the Civil Rights Division’s quarterly interagency meeting hosted by Assistant Attorney General Clarke with leaders representing Muslim, Arab, Sikh, South Asian, and Hindu communities. The meeting was co-hosted by Officer Shoba Sivaprasad Wadhia of the Department of Homeland Security’s Office for Civil Rights and Civil Liberties. The Department’s Civil Rights Division first began convening regular meetings with Muslim, Arab, Sikh, South Asian, and Hindu organizations following the Sept. 11, 2001, attacks. The organizations asked the Justice Department and other federal agencies to continue to take actions to protect their communities from unlawful discrimination and violence.
Also on Monday, Attorney General Garland, Deputy Attorney General Monaco, and Associate Attorney General Gupta hosted the Law Enforcement Quarterly Meeting, at which representatives from the Justice Department’s law enforcement and grantmaking components together with their state and local law enforcement partners, discussed the increase in threats against Jewish, Muslim, and Arab communities. Attorney General Garland emphasized to the group that in moments of crisis, strong partnerships and trust between law enforcement and communities are essential and that successfully preventing, disrupting, and prosecuting illegal acts of hate requires close coordination across government and across the country.
The meeting also included discussions regarding violent crime and challenges in recruitment and retention of law enforcement officers. Director Steven M. Dettelbach of the Bureau of Alcohol, Tobacco and Firearms (ATF) discussed the work ATF is doing to combat gun violence, as well as new technologies, such as ghost guns and machine gun conversion devices, that exacerbate the threat posed by illegal firearms. The Department continues to implement strategies to combat violent crime. A cornerstone of this effort is providing state and local partners with resources and support to help keep their communities safe. In light of that goal, the Justice Department announced on Thursday that Department investments in community safety have reached over $5.6 billion.
Earlier this month, Attorney General Garland directed the FBI and all 94 U.S. Attorneys’ Offices across the country to work with local law enforcement and community leaders to protect vulnerable communities in the wake of Hamas’ Oct. 7 terrorist attack in Israel.
Last week, the Department hosted a virtual forum to highlight the successful implementation of the United Against Hate (UAH) initiative in all 94 U.S. Attorneys’ Offices and discuss efforts to combat unlawful acts of hate. In conjunction with the event, the Civil Rights Division released a document highlighting the reach of the UAH program in its first year and examples of its impact in communities across the country. These include enhancing coordination on responding to threats to religious communities and sparking the creation of new initiatives at local colleges and similar institutions.
On Oct. 30, the Department announced that it is awarding over $38 million in grants to support the investigation and prosecution of hate crimes, increase hate crimes reporting, expand victim services, and improve community awareness.
Three Defendants Extradited from Germany, Morocco and Romania to Face Charges Related to Russian Cyberfraud SchemeRead the Press Release
Later Today, Nikolaj Sofinskij will be arraigned before United States Magistrate Judge Ramon E. Reyes, Jr., at a federal courthouse in Brooklyn on an indictment charging him and others with three counts each of conspiracy to commit wire and mail fraud and money laundering conspiracy and one count of aggravated identity theft, in connection with schemes to steal personally identifiable information (PII) on the black market and to buy merchandise in the United States for resale abroad based on the PII. Sofinskij was extradited to the United States yesterday after being arrested in Romania. For similar charges, defendants Ruslan Albertovich Nurullin was extradited to the United States from Morocco and arraigned at a federal courthouse in Brooklyn on September 15, and Aleksandr Popan was extradited to the United States from Germany and arraigned at a federal courthouse in Brooklyn on October 16.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the extraditions and charges.
“The defendants are charged with conspiring to defraud victims out of more than $48 million by stealing sensitive personal information, including social security numbers, and using it to buy and then resell electronics and luxury goods,” stated United States Attorney Peace. “This case shows that if criminals organize to target U.S. victims in their international crimes, our Office will unite with the international community to catch and bring them to justice.”
Mr. Peace thanked the Department of Justice’s Office of International Affairs, the Computer Crime and Intellectual Property Section, INTERPOL, the United States Marshals Service and the authorities of Morocco, Germany, and Romania for their assistance in securing the arrests and extraditions of Nurullin, Popan, and Sofinskij, respectively.
“Nurullin, Popan and Sofinskij allegedly engaged in multiple reshipping schemes, utilizing online communications to execute their scams, leading to $48 million in losses for their victims. The announcement today highlights the FBI’s commitment along with our international law enforcement partners to bringing criminals to the United States to be held accountable for their crimes,” stated FBI Assistant Director-in-Charge Smith.
As alleged in the indictment, from approximately 2013 to 2018, individuals located primarily in Russia and countries of the Commonwealth of Independent States (CIS) and Eastern Europe operated reshipping schemes to defraud merchants, banks and individuals in the United States. Nurullin, Popan and Sofinskij resided in Russia during the schemes, and they were arrested in their respective countries pursuant to INTERPOL Red Notices based on arrest warrants issued from the Eastern District of New York.
Scheme participants communicated online on websites called “Admin Panels.” Popan set up one of those Admin Panels, called USS-Design. Participants called “Stuffers” used stolen PII from victims—including their social security numbers and credit and debit card numbers—to buy merchandise such as smartphones, computers, luxury clothing and handbags from online retailers. These Stuffers deceived the retailers by having them ship merchandise to addresses in the United States, where the items would later be reshipped to Russia and to CIS and Eastern European countries for resale. Nurullin and Sofinskij served as Stuffers associated with the Admin Panels called Strongbox.cc, Arenaproject.it, and Astra Star Ave.
Participants divided profits frequently through a virtual currency exchange based in Russia, and they reinvested proceeds into the ongoing schemes, including by buying prepaid mailing labels to facilitate shipments to Russia and elsewhere. The reshipping schemes caused more than $48 million in losses to victims.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. The defendants face a maximum of 20 years’ imprisonment for each of the fraud, fraud conspiracy and money laundering counts. If convicted of the aggravated identity theft counts, the defendants face a mandatory additional sentence of 2 years’ imprisonment.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes, including mail and wire fraud and identity theft—such as the crimes that Nurullin, Popan and Sofinskij committed.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nicholas J. Moscow and Victor Zapana are in charge of the prosecution with assistance from Paralegal Specialist Emme Moosher, along with Trial Attorney Christopher D. Usher of the Department of Justice’s Violent Crime and Racketeering Section.
The Defendants:
RUSLAN ALBERTOVICH NURULLIN (also known as “ray.nolan” and “nolan”)
Age: 32
MoroccoALEKSANDR POPAN (also known as “exemption,” “popanus,” “Alexander Popan,” “Alexandr Popan” and “Alexander Popandopulo”)
Age: 40
GermanyNIKOLAJ SOFINSKIJ (also known as “pagnini,” “Nikola Sofinskiy” and “Mykola Petrovych Sofinskyi”)
Age: 42
RomaniaE.D.N.Y. Docket No. 19-CR-456 (PKC)
2023.10.16_redactions_for_nurullin_popan_and_sonfinskij_redacted.pdfLeader and Members of Moscow-Based Health Care Fraud and Money Laundering Conspiracy Charged in International Telemedicine SchemeRead the Press Release
A third superseding indictment was unsealed today in federal court in Brooklyn charging Brian Michael Sutton, Brycen Kay Millett, Anthony Santamaria, Joshua Manuel Alegria, Hershel Tsikman and Hafizullah Ebady with conspiracy to commit health care fraud, health care fraud and money laundering conspiracy. As alleged, the defendants participated in an international scheme to acquire pharmacies across the United States with pre-existing relationships with private health insurance companies. Using those pharmacies, in conjunction with call centers to induce individuals to accept unnecessary medications and a network of recruited physicians, the defendants generated more than $500 million in fraudulent prescriptions purportedly filled by the scheme pharmacies.
Santamaria, Alegria and Tsikman were arrested today in California and will be arraigned this afternoon in federal court in Los Angeles. Millett and Ebady were previously indicted and arrested on health care fraud charges, and will be arraigned at a later date. Sutton remains at large and is believed to reside in Moscow.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrests and charges.
“As alleged, the defendants orchestrated a massive international scheme to defraud American businesses out of hundreds of millions of dollars and attempted to hide behind multiple aliases, shell companies and straw owners,” stated United States Attorney Peace. “Fraudulent healthcare billing drives up the cost of medical services for all those who need it. We will continue to aggressively investigate and prosecute those who take advantage of health care plans.”
Mr. Peace thanked the Port Authority of New York and New Jersey, Office of Inspector General, for their invaluable assistance in the investigation.
“The defendants allegedly carried out a complex international health care fraud scheme that led to over half billion dollars in fraudulent prescriptions. Health care fraud schemes like this affect those directly targeted, but ultimately the general public who face increased medical costs as a result. The FBI will see to it that anyone attempting to benefit from health care fraud will face punishment in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.
As alleged, between 2017 and 2022, Sutton, a U.S. citizen residing in Russia, led his co-defendants in carrying out an international scheme to bill private insurers for hundreds of millions of dollars’ worth of fraudulent prescriptions. At Sutton’s direction, the conspirators oversaw call centers initially based in Utah, but later operated from Russia and other foreign nations. Call center employees telephoned beneficiaries enrolled in private insurers’ health care plans and offered prescription medications at little to no cost to the beneficiaries and without any medical exam to determine the medical necessity for those medications. The defendants also recruited doctors purportedly to review prescriptions by nurse practitioners and physician’s assistants after telemedicine visits. Contrary to what the recruited doctors were told, in many cases there were no telemedicine visits between the beneficiaries and any medical professionals. The conspirators generated fraudulent prescriptions under the physicians’ names and National Provider Identifier (NPI) numbers. Despite the prescriptions, many beneficiaries never received the medications.
To conceal their involvement, the defendants operated under multiple aliases, funneled millions of dollars through pass-through shell companies and straw owners, used end-to-end encrypted communications and moved operations overseas. Specifically, the defendants purchased and operated dozens of existing brick-and-mortar pharmacies through straw owners including in Brooklyn, Staten Island, Manhattan, Long Island, New Jersey, Pennsylvania, Texas, Michigan and Alabama. The conspirators also laundered millions of dollars in fraudulent proceeds from overseas through pass-through shell companies that they used to purchase the scheme pharmacies and conceal the defendants’ involvement.
After acquiring the brick-and-mortar pharmacies, the conspirators oversaw the installation of pharmacy management software that allowed for the remote submission of reimbursement requests by the scheme pharmacies to private insurers; they also trained and supervised a team of “billers” that remotely submitted hundreds of thousands of reimbursement requests totaling over $500 million for over 50 pharmacies. Ultimately, private insurers paid over $280 million as a result of the fraudulent billing.
Co-conspirators Dela Saidazim pleaded guilty in February 2023 and David Gary Bishoff pleaded guilty in March 2023 to health care fraud conspiracy and are awaiting sentencing.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent and unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys John Vagelatos, Jessica Weigel and Jonathan P. Lax are in charge of the prosecution with assistance from Paralegal Specialist William Daniels. Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.
The New Defendants:
BRIAN MICHAEL SUTTON (also known as “Mike Summers,” “Mike Miller” and “Ryan White”)
Age: 31
Moscow, RussiaANTHONY SANTAMARIA (also known as “Big Boy,” “Wade Watts,” “Pablo Rodriguez,” “Ryan Rusty” and “Bruce Peter”)
Age: 31
North Hollywood, CaliforniaJOSHUA MANUEL ALEGRIA (also known as “Jboy,” “Jaxon Asher” and “Turk Malloy”)
Age: 32
Woodland Hills, CaliforniaHERSHEL TSIKMAN (also known as “Andrew Milner,” “Andrew M.,” “Linus Caldwell,”
“Adam Schneider,” “Jonathan Martin,” and “H”)
Age: 30
Studio City, CaliforniaPreviously Charged Defendants:
BRYCEN KAY MILLETT (also known as “Brett Johnson” and “Tommy Wilkinson”)
Age: 33
Saint George, UtahHAFIZULLAH EBADY (also known as “Hafiz Ebady”)
Age: 45
Parsippany, New JerseyCo-Conspirators Who Previously Pleaded Guilty:
DAVID GARY BISHOFF (also known as “Bobby Fischer”)
Age: 39
Saint George, UtahDELA SAIDAZIM (also known as “Delila,” “Gina Payne,” and “Olivia Rothstein”)
Age: 34
Moscow, RussiaE.D.N.Y. Docket No. 21-CR-564 (S-3) (WFK)
Leader of $70M Cryptocurrency and Binary Options Fraud Schemes Extradited to the U.S.Read the Press Release
A Serbian man has been extradited to the United States, where he faces charges in two separate federal indictments in the Northern District of Texas and Eastern District of New York for his alleged participation in coordinated cryptocurrency and binary options schemes.
On Feb. 3, pursuant to a request for provisional arrest followed by a request for extradition, Georgian authorities arrested Kristijan Krstic, 48, in Batumi, Georgia. The U.S. Marshals Service (USMS) completed the removal of Krstic on Oct. 30 from Georgia to the Northern District of Texas.
Krstic arrived in the Northern District of Texas made his initial appearance today in the U.S. District Court for the Northern District of Texas, where he will first face charges before being transferred to face additional charges in the Eastern District of New York.
“This extradition is the result of continued coordination between the Justice Department and our Georgian law enforcement partners in the fight against transnational organized crime,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “We are committed to protecting the people of this nation by investigating and prosecuting individuals involved in cryptocurrency fraud.”
Northern District of Texas
In March 2020, a federal grand jury in the Northern District of Texas indicted Krstic for his role in defrauding investors worldwide out of more than $70 million through fraudulent cryptocurrency and binary options investment platforms. Krstic and more than a dozen other alleged fraudsters were also indicted on charges of conspiracy to commit wire fraud and conspiracy to commit money laundering in the superseding indictment in July 2020.
“The work on this case exemplifies the whole of the Justice Department to bring cyber-criminals – including those who use cryptocurrency and other purported cyber investment platforms to victimize the citizens of the United States – to justice,” said U.S. Attorney Leigha Simonton for the Northern District of Texas. “The U.S. Attorney’s Office for the Northern District of Texas will work hand-in-hand with our law enforcement partners to ensure that cyber-criminals are held accountable regardless of their location.”
According to court documents, the defendants allegedly helped create and market more than 20 fraudulent cryptocurrency and binary options investment platforms, including Start Options, Trinity Mining, Hedger Tech, BTC Mining Factory, Bitcoin Trading World, Dragon Mining, BTC Trader Online, Crypto Trading World, Go Solar Mining, BTC Falcon, Perpetual Energy, Perfect-Options, Options Rider, Option Giants, Banking Options, Aeon Options, Bancde Options, Instant Options, Fast Options, and Elite Options.
“The FBI remains committed to pursuing subjects across international boundaries who are increasingly utilizing sophisticated virtual asset schemes to defraud investors,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Victims were told their investment in Start Options and B2G would return significant wealth, but many were defrauded and harmed as a result. The FBI thanks our national and international partners for their efforts throughout the investigation to help bring justice for the victims.”
“This extradition occurred because of international cooperation and the FBI’s persistence to hold this individual accountable for defrauding thousands of innocent victims. Some victims lost their entire savings to this scheme and have not been able to financially recover,” said Special Agent in Charge Chad Yarbrough of the FBI Dallas Field Office. “We would like to thank our international partners for assisting us with the arrest and extradition of Mr. Krstic. He will now finally face charges for his actions in the United States.”
Krstic is charged in the Northern District of Texas with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering in an alleged scheme to create, promote, market, and organize fraudulent online investment platforms. If convicted, he faces a maximum penalty of 20 years in prison for each count.
The FBI Dallas Field Office is investigating the case.
Assistant U.S. Attorneys Michelle Winters and Nicole Dana for the Northern District of Texas are prosecuting the case. Assistant U.S. Attorneys Dimitri Rocha and John de la Garza for the Northern District of Texas assisted with forfeiture matters.
Eastern District of New York
In February 2021, a federal grand jury in the Eastern District of New York also indicted Krstic for his role in a cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms. According to court documents, Krstic was the founder of two digital-asset investment platforms, Start Options and B2G, and also served as the chief financial officer of Start Options. As alleged, between approximately 2017 and 2018, Krstic and others fraudulently induced U.S.-based investors to purchase securities in the form of investment contracts in Start Options and B2G. To perpetuate the fraud, Krstic allegedly used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G.
The indictment alleges that Start Options purported to be an online investment platform that provided cryptocurrency mining and digital-asset trading services, including trading in cryptocurrencies, commodities, stocks, and indices. Start Options also allegedly claimed that it was “the largest Bitcoin exchange in euro volume and liquidity” and that it was “consistently rated the best and most secure Bitcoin exchange by independent news media.” The indictment further alleges that B2G purported to be an “ecosystem” that would allow users to trade B2G tokens, as well as digital and fiat currencies, “on a secure, comprehensive platform.” Krstic and others allegedly represented that once investors opened a B2G account, a deposit of B2G “open[ed] a door to all the curtains inside Aladdin’s cave. Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins.”
“Kristijan Krstic used the hype and mystery of cryptocurrency to separate unwitting investors from their money,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “Krstic founded two online investment platforms which allowed him to steal $7 million in investor funds before closing up shop. Fleeing the country did not stop IRS-CI and our law enforcement partners from continuing our pursuit of justice, and today’s extraction demonstrates that no criminal is out of our reach.”
According to the indictment, however, the money that investors in Start Options and B2G sent was never invested and instead, was laundered internationally to a Philippines-based financial account and digital-currency wallet and diverted to John DeMarr, a U.S.-based promoter of the fraud. Subsequently, DeMarr allegedly transferred to Krstic approximately $7 million in investor funds from B2G and Start Options, and then Krstic stopped responding to all communications and absconded with those investors’ funds. A press release issued by Start Options claimed that the company had been sold to Russian venture capitalists.
Krstic is charged in the Eastern District of New York with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering. If convicted, he faces a maximum penalty of 20 years in prison.
On Jan. 31, DeMarr, 55, of Santa Ana, California, the former Director of North American Operations for Start Options and B2G, was sentenced to five years in prison for his role in the scheme.
U.S. Attorney Breon Peace for the Eastern District of New York joined in the announcement.
IRS-CI and the FBI Los Angeles Field Office are investigating the case.
The government of Georgia, including the Prosecution Service of Georgia, Ministry of Justice of Georgia, and the Ministry of Interior of Georgia, provided significant assistance in the extradition of Krstic to the United States. Republika Srpska Police (RS-MUP) assisted as well. The Justice Department’s Office of International Affairs also provided substantial assistance in securing the arrest and extradition of Krstic. USMS transported Krstic from Georgia to the United States.
Trial Attorney Tian Huang of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta, and David Pitluck for Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell for the Eastern District of New York.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Defendant Sentenced to Prison as Leader of Schemes to Defraud Internet Consumers and Financial InstitutionsRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Larby Amirouche was sentenced by United States District Judge Kiyo A. Matsumoto to 20 months in prison for his role in fraudulent internet marketing schemes utilizing e-commerce websites that purported to sell various dietary supplements, hair care products, skin care products, testosterone, and web-based business tutorials. As part of the sentence, the Court also ordered the defendant to pay $1.8 million in forfeiture and over $110,000 in criminal restitution. Amirouche pleaded guilty in May 2022 to conspiracy to commit bank fraud.
Breon Peace, United States Attorney for the Eastern District of New York, and Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the sentence.
“The prison term handed down today is appropriate and necessary for Amirouche who orchestrated internet marketing schemes that charged consumer credit cards for products that were ordered but never delivered or never ordered at all, and overbilled other consumers for products they had ordered from the defendant’s websites,” stated United States Attorney Peace. “This Office will not hesitate to enforce the law to protect consumers and financial institutions from fraudsters, and ensure integrity in the e-commerce marketplace.”
“Amirouche victimized unsuspecting consumers by creating a literal world wide web of lies, building an online platform to defraud his victims for his own personal gain. With this sentencing, he now is facing the full consequences of his actions,” stated IRS-CI Special Agent-in-Charge Fattorusso.
Amirouche was the managing member of Angry Elephant Marketing LLC and Purple Whale Management LLC. Between January 2012 and April 2016, Amirouche and his co-conspirators earned illegal profits by (1) charging consumer credit cards for products that were ordered but never delivered to the consumer; (2) charging consumer credit cards for products that were not purchased by the consumers and (3) repeatedly charging consumers for products that they had ordered from Amirouche’s websites.
Amirouche and his co-conspirators set up dozens of shell companies fronted by nominees they recruited to distance themselves from the fraudulent schemes and maximize the ill-gotten profits. Nominees were utilized in part because Amirouche and the corporate entities he controlled had been barred from opening new merchant accounts due to previous fraudulent activity. The profits were funneled to a bank account that was in the name of a nominee, but was actually controlled by Amirouche. From that account, Amirouche sent over $1.3 million to bank accounts in the names of other companies he controlled.
Amirouche and his co-conspirators also fraudulently established bank and merchant accounts for the shell companies so they could process credit card transactions and collect and transfer the proceeds of their crimes. The bank and merchant account applications the defendant submitted contained material falsehoods, including that the defendant was controlling the company, the nature of the business and forged signatures of the applicants.
In addition, Amirouche and his co-conspirators concealed material information from the financial institutions that supported the merchant card accounts. The misrepresentations were designed to prevent the financial institutions from discovering the frauds, which would have led to the financial institutions shutting off the accounts for the websites and stopping payment of funds to Amirouche.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft.
The government’s case is being handled by the Business and Securities Fraud Section. Assistant United States Attorney David C. Pitluck is in charge of the prosecution with the assistance of Paralegal Specialist Jake Menz.
The Defendant:
LARBY AMIROUCHE (also known as “Luke Williams”)
Age: 33
Highland Park, IllinoisE.D.N.Y. Docket No. 21-CR-64 (KAM)
Riverhead Resident Pleads Guilty to Conspiring to Distribute Large Quantities of Narcotics Including FentanylRead the Press Release
Earlier today, in federal court in Central Islip, Marquis Douglas, a narcotics trafficker who operated a drug business that was responsible for the distribution of large quantities of cocaine and fentanyl, along with other illicit substances throughout the North Fork of Long Island, pleaded guilty before United States District Judge Joanna Seybert to conspiring to distribute controlled substances and the distribution of controlled substances resulting in death. Douglas was charged in June 2022.
Breon Peace, United States Attorney for the Eastern District of New York, announced the guilty plea.
“Today, Douglas has admitted his role in a large scale narcotics distribution operation as well as his role in the distribution of fentanyl laced cocaine that led to the deaths of four men in a single day,” stated United States Attorney Peace. “We hope today’s guilty plea begins to bring a measure of solace to the victims’ families.”
Mr. Peace also extended his thanks to the Federal Bureau of Investigation, New York Field Office, the Suffolk County District Attorney’s Office, the Riverhead Police Department, the Southold Police Department, the Shelter Island Police Department, and the New York State Police for their assistance in the investigation.
According to court filings and statements made during today’s proceeding, Douglas orchestrated a years’ long conspiracy to distribute over five kilograms of cocaine, one kilogram of heroin, 280 grams of crack cocaine, 40 grams of fentanyl and a quantity of fentanyl analogues. In August of 2021, Douglas’ operation distributed a quantity of cocaine laced with a fentanyl analogue in Greenport, New York. When this cocaine was re-distributed at the street level, it ultimately led to four fatal overdoses on a single day across Greenport and Shelter Island. When apprehended in Suffolk County on May 5, 2022, Douglas was found in possession of large, sellable quantities of cocaine and fentanyl. When sentenced, Douglas faces up to life in prison.
The government’s case is being prosecuted by Assistant United States Attorneys Michael R. Maffei, Andrew P. Wenzel, and Special Assistant United States Attorney Dana Gremaux.
The Defendants:
MARQUIS DOUGLAS
Age: 38
Riverhead, New YorkE.D.N.Y. Docket No. 22-CR-246 (JS)
Four Arrested and Multiple Russian Nationals Charged in Connection with Two Schemes to Evade Sanctions and Send U.S. Technology Used in Weapons Systems to RussiaRead the Press Release
Four individuals were arrested, and an indictment and criminal complaint were unsealed this week in the Eastern District of New York regarding two separate conspiracies to unlawfully export controlled, dual-use technologies to Russia following Russia’s full-scale invasion of Ukraine.
Yesterday, a criminal complaint was unsealed, and a Brooklyn, New York, resident and two Canadian nationals were arrested in connection with a sophisticated global procurement scheme in which the defendants used two corporate entities registered in Brooklyn to unlawfully source and purchase millions of dollars’ worth of dual-use electronics on behalf of end-users in Russia, including companies affiliated with the Russian military. Some of the electronic components and integrated circuits shipped by the defendants are the same make, model, and part number that have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.
Separately, earlier today, a Brooklyn resident was arrested, and a four-count indictment was unsealed alleging an illegal exports scheme to procure dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine.
“Russia relies on critical technologies to wage its unlawful war in Ukraine, and the Justice Department will use all of our legal tools and authorities to deny them those technologies,” said Deputy Attorney General Lisa O. Monaco. “Today’s actions underscore the Department’s determination to hold accountable those who flout our laws by trying to evade sanctions and export controls to aid the Russian war machine. The defendants arrested over the last two days will now face justice for allegedly using false names and front companies to funnel sensitive electronics to Russia.”
“Protecting American technologies and securing innovation from foreign adversaries is of the utmost importance to U.S. national security,” said FBI Deputy Director Paul Abbate. “The conduct alleged in the charging documents represent a complete disregard for our nation’s security and our laws. The FBI and our partners remain committed to protecting American-made military and dual-use technologies by using every tool at our disposal. These law enforcement actions send a strong message that the FBI will never rest in our pursuit of those who intend to harm the United States and our allies.”
“In the past two days alone, the Justice Department and its law enforcement partners have arrested and charged multiple individuals accused of perpetrating sophisticated schemes to unlawfully acquire, conceal, and ship U.S. electronic components on behalf of the Russian defense industry,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The National Security Division is committed to holding accountable individuals who would defy U.S. law in support of Russian aggression in Ukraine.”
“We will continue to do everything in our power to take down Russian military procurement schemes like those alleged in these cases,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “When we identify U.S. components inside the types of Russian weapons being used to wreak destruction and death in Ukraine, we take action.”
“As both of these important cases demonstrate, in Brooklyn and around the world, the U.S. Attorney’s Office for the Eastern District of New York will not rest in making sure that military technologies do not fall into the wrong hands,” said U.S. Attorney Breon Peace for the Eastern District of New York. “As alleged, we have now stopped these six defendants from conducting sophisticated schemes to evade American sanctions and ship dual use electronics to fuel Russia’s war effort on the battlefield against Ukraine.”
United States v. Goltsev et al.
According to court documents, Nikolay Goltsev, 37, of Montreal, Canada; Salimdzhon Nasriddinov, 52, of Brooklyn; and Kristina Puzyreva, 32, of Montreal, Canada are charged in a sanctions evasion and export control scheme, in which millions of dollars’ worth of semiconductors, integrated circuits and other dual-use electronic components were unlawfully exported to Russia through two Brooklyn front companies.
Nasriddinov, a Brooklyn resident and dual citizen of Russia and Tajikistan, was arrested on Oct. 31 in Brooklyn. Goltsev and Puzyreva were arrested at a hotel in Manhattan on Oct. 31 during a trip to New York to visit Nasriddinov.
As alleged, the defendants used two corporate entities registered in Brooklyn – SH Brothers Inc. and SN Electronics Inc. – to facilitate the scheme and unlawfully source, purchase, and ship millions of dollars’ worth of dual-use electronics from U.S. manufacturers to sanctioned end-users in Russia. Many of the electronic components and integrated circuits shipped by the defendants through SH Brothers were, according to the Department of Commerce “of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems, Russia’s lack of domestic production, and limited global manufacturers.”
According to the complaint, some of the electronic components and integrated circuits shipped by the defendants through SH Brothers are the same make, model, and part number that have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including the Torn-MDM radio reconnaissance complex, the RB-301B “Borisoglebsk-2” electronic warfare complex, the Izdeliye 305E light multi-purpose guided missile, the Vitebsk L370 airborne counter missile system, Ka-52 helicopters, Orlan-10 unmanned aerial vehicles (UAVs), and T-72B3 battle tanks.
During the period charged in the complaint, SH Brothers made hundreds of shipments valued at over $7 million to Russia.
As alleged, Goltsev received orders from Russian end-users in the defense and technology sectors who sought to acquire a particular item or part from the United States. Goltsev then communicated directly with U.S. manufacturers and distributors, typically using aliases such as “Nick Stevens” or “Gio Ross.” Nasriddinov and Goltsev purchased electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be sent to various locations in Brooklyn. Nasriddinov and Goltsev then unlawfully shipped the items to a variety of intermediary corporations located in other countries, including Turkey, Hong Kong, India, China, and the United Arab Emirates, where they were rerouted to Russia. Puzyreva operated numerous bank accounts and conducted financial transactions in furtherance of the scheme.
As described in the complaint, the defendants were aware that the electronics being exported had potential military applications. For example, in a November 2022 message exchange between Nasriddinov and Goltsev, Goltsev commented how shipping to Russia had become “dangerous” and discussed a shipment of electronic components that had been detained by U.S. officials at John F. Kennedy International Airport. Nassridinov responded that “Ukrainians alleged that they’re being bombed from parts from there [the U.S. manufacturer], maybe that’s why they started investigating everything?” Goltsev responded that, “we need to figure out why they keep holding the package ... I don’t really understand how they figured [it] out.” In a subsequent message, Goltsev commented that, “in the future we will need to load from several companies, not to attract attention ... for now large packages will be dangerous until we understand what they figured out ... we will need to think of diversifying the load ... so that not everything is not moving from the same deck.” Additionally, in a February 2023 message, Nasriddinov wrote to Goltsev, “Happy Defender of the Fatherland,” referring the holiday in Russia and parts of the former Soviet Union celebrating those who served in the armed forces. Goltsev responded, “happy holiday to you too my friend, we are defending it in the way that we can [smile emoji].”
The FBI, Department of Commerce’s Bureau of Industry and Security, and Department of Homeland Security Homeland Security Investigations are investigating the case.
Assistant U.S. Attorneys Artie McConnell and Ellen H. Sise for the Eastern District of New York and Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analyst Mary Clare McMahon. Assistant U.S. Attorney Laura Mantell for the Eastern District of New York is handling forfeiture matters.
United States v. Grigorev et al.
In a four-count indictment unsealed today in the Eastern District of New York, Nikita Arkhipov, 39, and Artem Oloviannikov, 37, both of St. Petersburg, Russia; and Nikolay Grigorev, 36, of Brooklyn; are charged with conspiracy and other offenses related to an export control scheme to benefit companies affiliated with the Russian military, including SMT-iLogic, a sanctioned Russian entity that has been identified as part of the supply chain for producing Russian military drones used in Russia’s war against Ukraine.
Grigorev was arrested today. Arkhipov and Oloviannikov remain at large.
As alleged in the indictment and other court filings, the defendants used a corporate entity, Quality Life Cue LLC (QLC), to facilitate their illegal export control scheme. QLC was registered in Brooklyn and controlled by Grigorev and Oloviannikov, with Arkhipov utilizing a QLC email account from Russia. Through QLC, the defendants procured dual-use electronic components, including semiconductors, for entities in Russia involved in the Russian war effort in Ukraine.
According to court documents, between Oct. 22, 2021, and Feb. 22, 2022, QLC accounts controlled by Grigorev received wire transactions from iLogic totaling approximately $273,000. These funds were used almost entirely to make payments to a Brooklyn-based electronics distributor or to pay Grigorev’s credit cards, which he used to buy goods from the Brooklyn-based company. Email and chat communications amongst the defendants explicitly reference efforts to circumvent U.S. sanctions; use “test” or “fictitious” orders to test new supply lines to Russia; and to discuss front companies in third countries, including Kazakhstan. In June 2023, a court-authorized search warrant of Grigorev’s residence in Brooklyn successfully interdicted over 11,500 electronic components purchased from the Brooklyn-based company that were awaiting unlawful export to Russia.
The FBI and Department of Commerce’s Bureau of Industry and Security are investigating the case.
Assistant U.S. Attorneys Artie McConnell, Rebecca Schuman, and Kate Mathews for the Eastern District of New York and Trial Attorney Natalya Savransky of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analyst Mary Clare McMahon.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
A criminal complaint and an indictment are merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Grigorev et al. Indictment Goltsev et al. complaintFounders and Executives of Digital-Asset Company Charged in Multi-Million Dollar International Fraud SchemeRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy for their roles in defrauding investors in a decentralized finance digital asset called “SafeMoon” (SFM) that was issued by their company SafeMoon LLC. As alleged, the defendants lied to SFM investors concerning whether SFM’s use of ‘locked’ liquidity was inaccessible to the defendants, as well as their personal holding and trading of SFM. As SFM’s market capitalization grew to more than $8 billion, the defendants fraudulently diverted and misappropriated millions of dollars’ worth of purportedly “locked” SFM liquidity for their personal benefit. Earlier today, Karony was arrested in Provo, Utah, and Smith was arrested in Bethlehem, New Hampshire. Nagy remains at large.
Breon Peace, United States Attorney for the Eastern District of New York; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York Field Office (IRS-CI), announced the arrests and charges.
“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate,” stated United States Attorney Peace. “As fraudsters increasingly use digital assets to mislead investors and misappropriate funds, our Office will be at the forefront of pursuing them and their ill-gotten gains. We will continue our focus in the digital asset space and bring those who defraud investors in this area to justice.”
Mr. Peace expressed his appreciation to the U.S. Securities and Exchange Commission for its assistance with the case.
“As alleged, SafeMoon’s executives grew their company value to over $8 billion, but instead of rewarding their clients as promised, their insatiable greed led them to spend millions of dollars on their own lavish desires. Today, no luxury vehicles or sprawling real estate can protect them from the consequences of such crimes,” said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations, New York. “HSI New York will relentlessly pursue individuals who seek to exploit investors and the American financial system for their own gain.”
“Although this fraud scheme may be complex, the end result is simple—theft. Investors were assured their money would be safe while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and their driveways. Through cryptocurrency tracing and good old-fashioned police work, IRS-CI New York’s Cyber and J5 groups worked with our investigative partners to track the millions in diverted funds and arrest the perpetrators of this con,” stated IRS-CI Special Agent-in-Charge Fattorusso.
Background on SFMAs alleged, SFM tokens were digital assets first issued in March 2021 by SafeMoon LLC on a public blockchain. Through the operation of SFM’s smart contracts, every transaction in SFM was automatically subject to a 10% tax, meaning, for example, that if a holder of SFM transferred 10 SFM to another user, 1 SFM would automatically be retained from the transfer as a tax, and the remaining 9 SFM would be received by the other party. As marketed to SFM investors, the proceeds of SFM’s 10% tax were split into two 5% tranches, the proceeds of which were supposed to benefit holders of SFM in specific ways. The first 5% tranche of the tax proceeds would be “reflected” back to, and distributed among, all SFM holders, in proportion to their current SFM holdings and thereby increase the total quantity of SFM held by every SFM investor automatically. The remaining 5% tranche of SFM tax proceeds would be deposited into designated SFM liquidity pools. The larger the SFM liquidity pool, the greater the liquidity in the market for SFM. In the months after its launch in March 2021, SFM grew to have more than one million holders and a market capitalization of more than $8 billion.
The Defendants’ Fraudulent SchemeAs alleged, the defendants misrepresented to investors various material aspects of the SFM offering, including that SFM relied on “locked” liquidity pools that would automatically increase in size due to a 10% tax imposed on every SFM transaction; that the “locked” SFM liquidity pool prevented the defendants and other insiders at SafeMoon from being able to “rug pull”—a type of crypto fraud—SFM investors by removing liquidity from the SFM liquidity pool; that tokens in the liquidity pool would not be used to enrich the SafeMoon developers, including the defendants; that the defendants would manually add token pairs to the SFM liquidity pool when transactions of SFM occurred on specific centralized exchanges; and that the developers were not holding and trading SFM for their benefit.
In reality, the defendants allegedly retained access to the SFM liquidity pools and they used that access to intentionally divert and misappropriate millions of dollars’ worth of tokens from the SFM liquidity pools for their personal benefit. In addition, although they publicly denied that they personally held or traded SFM, the defendants repeatedly bought and sold SFM for their personal benefit, including at the height of SFM’s market price, which generated millions of dollars in profits. The defendants masked their movement of the fraudulent proceeds via numerous private un-hosted crypto wallet addresses, complex transaction routing, and pseudonymous centralized exchange accounts. The defendants used some of these proceeds to purchase luxury vehicles and real estate in New Hampshire, Utah, and Florida. Smith, for example, using cryptocurrency addresses he controlled, sent 2,900 Binance Coin (BNB) worth more than approximately $860,000 and traceable to the SFM liquidity pool to a third party’s cryptocurrency address in order to purchase a custom Porsche 911 sportscar and non-fungible token.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Drew G. Rolle, Matthew R. Galeotti and John O. Enright are in charge of the prosecution with assistance from Paralegal Specialist Jacob Menz.
The Defendants:
BRADEN JOHN KARONY (also known as “John Karony” and “CPT HODL T MUN”)
Age: 27
Provo, UtahKYLE NAGY (also known as “Safemoon Dev”)
Age: 35
Vero Beach, FloridaTHOMAS SMITH (also known as “papa”)
Age: 35
Bethlehem, New HampshireE.D.N.Y. Docket No. 23-CR-433
Felon Sentenced to 57 Months in Prison in Connection with Firearm Trafficking SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, United States District Judge Joan M. Azrack sentenced Dennis Wolfolk of Marietta, Georgia, to 57 months in prison for possessing firearms in relation to a larger scheme to purchase and illegally transport into New York more than two dozen handguns. Wolfolk pleaded guilty in May 2023 to being a felon in possession of a firearm. Co-defendant Patrick Polidore pleaded guilty in September 2023 to making false statements to acquire firearms and is awaiting sentencing.
Breon Peace, United States Attorney for the Eastern District of New York, and Thomas Kalogiros, Assistant Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announced the charges.
“The so-called gun trafficking “Iron Pipeline” from Georgia to Long Island took a detour to a federal courtroom for Wolfolk, a convicted felon, who was punished today for his continuing disregard of the law and serious criminal conduct that resulted in guns being found in the hands of juveniles, a parolee, criminals and at the scene of a murder,” stated United States Attorney Peace. “This Office and our law enforcement partners are working tirelessly to investigate and prosecute those like the defendant who attempt to circumvent state and federal gun laws and contribute to the presence of deadly guns in our community.”
Mr. Peace thanked the United States Attorney’s Office for the Northern District of Georgia, the ATF’s Atlanta Field Division, the Nassau County District Attorney’s Office, the Nassau County Police Department, and the Hempstead Police Department for their assistance in the investigation.
“The interstate flow of illegal guns is a grave threat to public safety,” stated ATF Assistant Special Agent-in-Charge Kalogiros. “This sentencing sends a clear message to those who think they can traffic firearms into NY without consequence. ATF NY will continue to share Crime Gun Intelligence with law enforcement partners across all boundaries to identify, disrupt and dismantle firearms trafficking schemes. Each illegal firearm recovered is a potential life saved. I commend the work of ATF NY’s Long Island Field Office, Nassau County PD, Hempstead PD and EDNY for their diligent efforts and collaboration through this investigation.”
Between October and December 2020, Polidore visited numerous federally licensed retailers in the Atlanta metropolitan area and acted as the straw purchaser for approximately 27 handguns, many of which were purchased in rapid succession on a handful of common dates. For example, on October 29, 2020, Polidore purchased two handguns from two different retailers; six days later, on November 4, 2020, he purchased six more handguns from four different retailers; on November 18, 2020, he purchased five firearms from four different retailers; between November 20, 2020 and November 23, 2020, he purchased 10 handguns from at least four different retailers; on November 30, 2020, he purchased two handguns from two different retailers; and two days later, on December 2, 2020, he purchased three more handguns from two different retailers. On ATF Forms 4473—federal records that document firearms transactions—Polidore falsely affirmed that he was the intended recipient of the weapons when, in actuality, he had conspired with Wolfolk, who, as a convicted felon, was legally prohibited from possessing a firearm, to traffic the handguns to New York, where he distributed them to street-level buyers, many of whom were themselves prohibited from having a gun.
At least 12 of the handguns Wolfolk transported to New York have been recovered by law enforcement at crime scenes in and around Long Island. On November 4, 2020, for example, Polidore purchased six firearms from four different retail locations in Georgia, which Wolfolk trafficked to New York. Shortly after, those firearms began emerging on Long Island. On December 22, 2020, a serialized gun box matching a .40-caliber Glock model 27 handgun purchased by Polidore was recovered from the scene of a murder in Hempstead. On January 13, 2021, during a traffic stop in Hempstead, three juveniles were found in possession of a 9mm Ruger model Security-9 handgun purchased by Polidore. on May 28, 2021, during a traffic stop in Patchogue, police arrested an individual in possession of a .22-caliber Walther model P22 handgun purchased by Polidore. And on October 3, 2021, a .40-caliber Smith & Wesson handgun purchased by Polidore was recovered from a robbery suspect in Bethpage.
Other firearms involved in the scheme were similarly recovered in the hands of criminals. On January 12, 2021, for example, a Taurus 9mm model G3C handgun purchased by Polidore on November 23, 2020, was recovered from a parolee in Lynbrook.
Wolfolk has a previous felony conviction for attempted second-degree criminal possession of a firearm.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Anthony Bagnuola and Mark E. Misorek are in charge of the prosecution, with assistance from Special Agent Michael Cassidy.
The Defendants:
DENNIS WOLFOLK
Age: 30
Marietta, GeorgiaPATRICK POLIDORE
Age: 33
Powder Springs, GeorgiaE.D.N.Y. Docket No. 22-CR-347 (JMA)
Brooklyn Resident and Two Russian Nationals Charged with Exporting Dual-Use Electronics Used in Russian Military's DronesRead the Press Release
A four-count indictment was unsealed yesterday in Brooklyn charging Nikita Arkhipov, Nikolay Grigorev and Artem Oloviannikov with conspiracy and other charges related to an export control scheme to benefit companies affiliated with the Russian military. Grigorev, a Brooklyn resident, was arrested on November 1, 2023. Arkhipov and Oloviannikov remain at large.
As alleged in the indictment and other court filings, the defendants utilized a Brooklyn-based corporate entity, Quality Life Cue LLC (QLC), to facilitate the export control scheme. QLC was registered and controlled by Grigorev and Oloviannikov, with Arkhipov utilizing a QLC email account from Russia. Through QLC, the defendants procured dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine.
Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General, National Security Division, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Jonathan Carson, Special Agent in Charge, Office of Export Enforcement, New York Field Office, Bureau of Industry and Security, US Department of Commerce announced the charges.
“As alleged, these defendants conducted a sophisticated scheme, violating American sanctions in order to fuel Russia’s war effort,” stated United States Attorney Peace. “In Brooklyn and around the world, our Office will not rest in making sure that military technologies do not fall into the wrong hands.”
“In the past two days alone, the Justice Department and its law enforcement partners have arrested and charged multiple individuals accused of perpetrating sophisticated schemes to unlawfully acquire, conceal, and ship U.S. electronic components on behalf of the Russian defense industry,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The National Security Division is committed to holding accountable individuals who would defy U.S. law in support of Russian aggression in Ukraine.”
“Sanctioned dual-use electronic components intended for the Russian military were allegedly obtained and exported by the defendants. Export control laws are put in place to defend our national security and any violation of these laws is extremely serious. FBI New York will ensure that anyone responsible for evading these laws is punished in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.
“The Office of Export Enforcement is focused on rooting out the illicit procurement networks that supply Russia’s ongoing war in Ukraine. We will continue to collaborate with our law enforcement partners and leverage our unique authorities to prosecute these violators responsible, as alleged in the indictment, for undermining the extensive sanctions put in place to stem the flow of war materials to Russia’s military,” stated Jonathan Carson, Special Agent in Charge, Office of Export Enforcement, New York Field Office, Bureau of Industry and Security, US Department of Commerce.
SMT-iLogic
The most notable of these entities is SMT-iLogic, a Russia-based technology company. SMT-iLogic is associated with an entity known as the Special Technology Centre (STC). STC is a Russia-based entity that was added to the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Person List (SDN List) on or about December 29, 2016, for assisting the foreign military intelligence agency of Russia’s armed forces, commonly known by the acronym “GRU,” in conducting signals intelligence operations.
According to public reporting, SMT-iLogic shares an address with STC in St. Petersburg, Russia, was founded by a top Russian scientist and major shareholder of STC, and has imported millions of dollars’ worth of electronics into Russia. On or about May 19, 2023, SMT-iLogic was also added to the SDN List. Per OFAC, SMT-iLogic “is known to be involved in the supply chain for producing Russian military UAVs used in Russia’s war against Ukraine.”
On or about January 4, 2017, STC was added by the U.S. Department of Commerce, Bureau of Industry and Security (BIS) to the Entity List for supporting the GRU. STC was involved in the production of the “Sea Eagle Orlan 10 UAV,” a drone vehicle that has been involved in Russian military operations in Ukraine. STC’s biggest customer, according to the same reporting, is Russia’s Ministry of Defense, which paid STC the equivalent of nearly $99 million between February and August of 2022.
Export Control Scheme
As alleged in the indictment and other court filings, between October 22, 2021 and February 22, 2022, QLC accounts controlled by Grigorev received wire transactions from iLogic totaling approximately $272,830.40. These funds were used almost entirely to make payments to a Brooklyn-based electronics distributor (the “Brooklyn Company”) or pay Grigorev’s credit cards, which he used to buy goods from the Brooklyn Company. Email and chat communications among the defendants explicitly reference efforts to circumvent U.S. sanctions, use “test” or “fictitious” orders to test new supply lines to Russia, and discuss front companies in third countries. In June 2023, a court-authorized search warrant of Grigorev’s residence in Brooklyn successfully interdicted over 11,500 electronic components purchased from the Brooklyn Company that were awaiting unlawful export to Russia.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell, Rebecca Schuman and Kate Mathews are in charge of the prosecution, along with Trial Attorney Natalya Savransky of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Litigation Analyst Mary Clare McMahon.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
The Defendants:
NIKITA ARKHIPOV
AGE: 39
SAINT PETERSBURG, RUSSIANIKOLAY GRIGOREV
AGE: 36
BROOKLYN, NYARTEM OLOVIANNIKOV
AGE: 37
SAINT PETERSBURG, RUSSIAE.D.N.Y. Docket No. 23-M-429
Four Men Indicted for Defrauding Global Financial Services Company Based in Menlo Park, California of over Two Million DollarsRead the Press Release
A two-count indictment was unsealed today in federal court in Central Islip charging four men with conspiracy to commit securities fraud and money laundering conspiracy in connection with a scheme to steal millions of dollars from a global financial services company based in Menlo Park, California. The charges arise from a wide-ranging scheme by the defendants to create hundreds of sham brokerage accounts in order to access short-term cash advances which the defendants then stole through a complex options trading scheme. In total, the defendants recruited dozens of individuals to engage in their fraudulent scheme and stole more than $2 million.
Eduardo Hernandez was arrested today in Atlantic City, New Jersey and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Lois Bloom. Christopher Flagg and Daquan Lloyd were arrested earlier today on Long Island and will be arraigned this afternoon in federal court in Central Islip before United States District Judge Gary R. Brown. The fourth defendant, Corey Ortiz, remains at large.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrests and charges.
“The defendants are charged with stealing millions of dollars by creating fraudulent brokerage accounts and engaging in sham trading,” stated United States Attorney Peace. “For years, the defendants deceived others to line their own pockets. Today’s indictment shows that this Office will hold accountable anyone who tries to manipulate the financial system.”
U.S. Attorney Peace thanked the Securities and Exchange Commission for their assistance with the case.
“The defendants allegedly engaged in a sprawling multiyear complex financial fraud scheme, which saw more than 2 million dollars stolen. This type of scam is not only illegal, but weakens the public’s faith in our financial marketplace. The FBI will continue to ensure that anyone attempting to benefit from this type of fraud is punished in the criminal justice system,” said FBI Assistant Director-in-Charge Smith.
As alleged in the indictment, between December 2018 and January 2023, the defendants engaged in a scheme to defraud a global financial services company of millions of dollars of short-term cash advances, called “Instant Deposits.” The Instant Deposits were intended to enable legitimate investors to immediately trade in their brokerage accounts without having to wait for an incoming wire transfer to clear. To gain access to millions of dollars of Instant Deposits, which were typically capped at $5,000 per account, the defendants established a multi-state recruitment network through which the defendants opened hundreds of fraudulent accounts held in the names of straw account holders, or “Losing Accounts.”
Using the Instant Deposits available to the Losing Accounts, the defendants repeatedly bought thinly traded and highly speculative stock options at above-market prices. Selecting these virtually worthless stock options enabled the defendants to match their bids in the Losing Account with offers to sell the same overpriced stock options initiated by other brokerage accounts, or “Winning Accounts,” that were also controlled by the defendants and their conspirators. In effect, the defendants transferred the Instant Deposits from the Losing Accounts to the Winning Accounts by way of fraudulent securities transactions.
Meanwhile, the incoming wire transfers supposed to cover the Instant Deposits in the Losing Accounts had purposely been initiated by the defendants from bank accounts that had little or no balance. These wire transfers, therefore, failed to clear, but not before the defendants drained the Instant Deposits, leaving the accounts with negative balances and worthless options. The defendants then laundered the stolen funds through multiple electronic banking platforms.
In total, the defendants recruited dozens of individuals to engage in their fraudulent scheme and stole more than $2 million.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 25 years in prison.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft.
The government’s case is being handled by the Business and Securities Fraud Section. Assistant United States Attorneys Jonathan P. Lax and Sara K. Winik are in charge of the prosecution with the assistance of Paralegal Specialist Jake Menz.
The Defendants:
EDUARDO HERNANDEZ (also known as “Ghost”)
Age: 33
Lindenhurst, New YorkCHRISTOPHER FLAGG (also known as “Venus”)
Age: 28
Copiague, New YorkDAQUAN LLOYD (also known as “Payday”)
Age: 29
Copiague, New YorkCOREY ORTIZ (also known as “Jefe”)
Age: 29
Greensboro, North CarolinaE.D.N.Y. Docket No. 23-CR-428 (GRB)
Brooklyn Resident and Two Russian-Canadian Nationals Charged with Massive Sanctions Evasion and Export Control SchemeRead the Press Release
A criminal complaint was unsealed yesterday in Brooklyn charging Nikolay Goltsev, Salimdzhon Nasriddinov and Kristina Puzyreva, with conspiracy and other charges related to a global procurement scheme on behalf of sanctioned Russian entities, including companies affiliated with the Russian military. Some of the electronic components and integrated circuits shipped by the defendants have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. Nasriddinov, a Brooklyn resident and dual citizen of Russia and Tajikistan, was arrested this morning in Brooklyn. Goltsev and Puzyreva were arrested at a hotel in Manhattan this morning during a trip to New York to visit Nasriddinov.
Breon Peace, United States Attorney for the Eastern District of New York, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations New York (HSI), James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement (BIS) announced the charges.
“As alleged, the defendants evaded sanctions, shipping equipment to Russia vital for their precision-guided weapons systems, some of which has been used on the battlefield in Ukraine,” stated U.S. Attorney Peace. “Individuals and companies in the Eastern District should know that our Office will use all tools available to prosecute those who evade sanctions to aid hostile nation states.”
U.S. Attorney Peace thanked U.S. Customs and Border Protection and Department of Justice’s Office of International Affairs for their valuable assistance to the investigation.
“With these defendants in U.S. custody, we have disrupted a sophisticated procurement network allegedly used to procure critical technologies for the Russian military’s advanced weapons systems,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department is committed to imposing accountability and exposing tactics used by hostile nation-states to illicitly acquire items they need to perpetuate their brutal campaigns.”
“These defendants are alleged to have illegally exported millions of dollars in electronics to support the Kremlin in its ongoing attacks of Ukraine. Over the course of a year, this criminal organization evaded U.S. sanctions and laws, managing to dispatch over 300 shipments of restricted items, valued at approximately $7 million USD, to the Russian battlefield. This unlawful activity would have persisted if not for the law enforcement collaborative efforts that led to today's charges," said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations, New York. "HSI New York remains committed to utilizing its unique authorities to relentlessly pursue individuals who seek to exploit U.S. export control laws for financial gain.”
“The arrests announced today demonstrate our sustained focus on targeting illicit Russian procurement networks, especially those attempting to acquire sensitive U.S. technologies that BIS has identified as critical high priority items for Russia’s military,” said Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. “To be clear: it doesn’t matter if those networks use a front company or transship these items using intermediaries in places like Turkey, Hong Kong, India, China and the United Arab Emirates, with final destination in Russia. We will use all of our tools to hold such actors to account.”
"The defendants allegedly were part of a global procurement scheme designed to evade United States’ sanctions and export controls. This case, once again, shows the willingness of Russia to ignore the laws of the United States, using illegal procurement networks to provide for their military. FBI New York and our partners will hold anyone attempting to procure sanctioned equipment accountable in the criminal justice system in order to protect our national security,” said James Smith, Assistant Director-in-Charge, FBI.
As alleged, the defendants used two corporate entities registered in Brooklyn, SH Brothers Inc. and SN Electronics Inc., to facilitate the scheme. These entities unlawfully sourced, purchased and shipped millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia. Many of the electronic components and integrated circuits shipped by the defendants through SH Brothers were, according to the Department of Commerce, “of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems, Russia’s lack of domestic production, and limited global manufacturers.” As described in the complaint and other court filings, some of the electronic components and integrated circuits with the same make, model and part number shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including the Torn-MDM radio reconnaissance complex, the RB-301B “Borisoglebsk-2” electronic warfare complex, the Izdeliye 305E light multi-purpose guided missile, the Vitebsk L370 airborne counter missile system, Ka-52 helicopters, Orlan-10 unmanned aerial vehicles (UAVs) and T-72B3 battle tanks. During the period charged in the complaint, SH Brothers made hundreds of shipments valued at over $7 million to Russia.
Goltsev received orders from Russian end users in the defense and technology sectors who sought to acquire a particular item or part from the United States. Goltsev then communicated directly with U.S. manufacturers and distributors, typically using aliases such as “Nick Stevens” or “Gio Ross.” Nasriddinov and Goltsev purchased electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics, and arranged for the items to be sent to various locations in Brooklyn. Nasriddinov and Goltsev then unlawfully shipped the items to a variety of intermediary corporations located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia. Puzyreva operated numerous bank accounts and conducted financial transactions in furtherance of the scheme.
As described in the complaint, the defendants were aware that the electronics being exported had potential military applications. For example, in a message exchange on or about and between November 8, 2022 and November 15, 2022 between Nasriddinov and Goltsev, Goltsev commented how shipping to Russia had become “dangerous” and discussed a shipment of electronic components that had been detained by U.S. officials at John F. Kennedy International Airport in Queens, New York. Nassridinov responded that “Ukrainians alleged that they’re being bombed from parts from there [the U.S. manufacturer], maybe that’s why they started investigating everything?” Goltsev responded that, “we need to figure out why they keep holding the package ... I don’t really understand how they figured [it] out.” In a subsequent message, on or about November 9, 2022, Goltsev commented that, “in the future we will need to load from several companies, not to attract attention ... for now large packages will be dangerous until we understand what they figured out ... we will need to think of diversifying the load ... so that not everything is not moving from the same deck.” In a February 23, 2023 message, Nasriddinov wrote to Goltsev, “Happy Defender of the Fatherland,” referring to the holiday in Russia and parts of the former Soviet Union celebrating those who served in the armed forces. Goltsev responded, “happy holiday to you too my friend, we are defending it in the way that we can [smile emoji].”
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Ellen H. Sise are in charge of the prosecution, along with Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Litigation Analyst Mary Clare McMahon. Assistant United States Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
The Defendants:
NIKOLAY GOLTSEV
AGE: 37
MONTREAL, CANADASALIMDZHON NASRIDDINOV
AGE: 52
BROOKLYN, NYKRISTINA PUZYREVA
AGE: 32
MONTREAL, CANADAE.D.N.Y. Docket No. 23-M-956
OFAC-Designated Colombian National Extradited to Face Charge of Distributing Cocaine InternationallyRead the Press Release
Tito Aldemar Ruano Yandun, also known as “Don T,” “Don Ti,” “Don Tito,” “Pedro Linares,” “Pedro AK2,” “Santos,” “Don Tuma,” “Viejo” and “Viejo Loco,” will be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr., at the federal courthouse in Brooklyn on an indictment charging him with leading an international cocaine distribution conspiracy. The defendant, a Colombian citizen, was arrested in Colombia pursuant to a U.S. provisional arrest request and was extradited to the United States on October 25, 2023.
Breon Peace, United States Attorney for the Eastern District of New York; Deanne Reuter, Special Agent-in-Charge, Drug Enforcement Administration, Miami Division (DEA); Edward A. Caban, Commissioner, New York City Police Department (NYPD); and Dominick L. Chiumento, Acting Superintendent, New York State Police (NYSP), announced the extradition and arraignment.
“As alleged, the defendant is a drug kingpin who led an international trafficking organization that produced and exported thousands of kilograms of cocaine from Colombia and Ecuador to the United States,” stated United States Attorney Peace. “This Office will continue to pursue and bring to justice the leaders of transnational criminal organizations, wherever they are in the world.”
Mr. Peace extended his appreciation to the DEA’s office in Bogota, Colombia, the United States Marshals Service, the United States Department of State, the Colombian National Police, and the Government of Colombia. The Justice Department’s Office of International Affairs and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) Judicial Attaché Office in Bogotá, Colombia provided valuable assistance with securing the arrest and extradition of Ruano Yandun.
“This indictment is a testament to the incredible hard work and resiliency of our investigators and speaks to the strength of our partnerships with our local, state, and federal law enforcement partners, as well as our international counterparts. DEA’s message is clear: we will continue to work relentlessly to dismantle and defeat the international drug trafficking organizations responsible for bringing this poison into our communities, threatening the safety and health of our citizens,” stated DEA Special Agent-in-Charge Reuter.
“This case proves again that New York City law enforcement has a very long reach and that anyone who participates in a criminal network – whether locally or globally – will be held to full account for their actions,” stated NYPD Commissioner Caban. “I thank the U.S. Attorney for the Eastern District of New York, the DEA, the New York State Police, and all the members of OCDETF, for their dedication to this important long-term investigation.”
“This indictment speaks to the tremendous interagency coordination and cooperation necessary to get illegal drugs off our streets,” stated NYSP Acting Superintendent Chiumento. “As a result of this effort, a dangerous international drug trafficking operation, and the organized crime perpetuated by it, has been shut down. A drug like cocaine destroys communities and puts lives at risk. I applaud the U.S. Attorney’s Office and all involved law enforcement partners for their outstanding efforts in dismantling this operation. This case sends a clear message that we will not tolerate this illegal activity in our communities, and we will continue to work together to keep our communities safe.”
According to the indictment, court filings, and statements made in court, Ruano Yandun allegedly led a sophisticated drug trafficking organization (“DTO”) that operated in southwestern Colombia and Ecuador. After procuring cocaine from laboratories operating in Colombia, Ruano Yandun’s DTO arranged for the cocaine to be transported from Colombia and Ecuador through the Pacific Ocean via “go-fast vessels” (“GFVs”). Such GFVs typically carried several hundred kilograms of cocaine at a time. After being loaded with cocaine in Colombia or Ecuador, the GFVs would travel to Guatemala or other Central American countries. Upon successfully arriving in such countries, co-conspirators took possession of the cocaine and transported it by land into Mexico. Co-conspirators then usually sold the cocaine to Mexican DTOs, who would invariably smuggle the cocaine into the United States to be sold. The defendant’s organization exported thousands of kilograms of cocaine to Central America and Mexico so that it could eventually be smuggled into the United States. As part of the investigation, law enforcement authorities seized over 3,000 kilograms of cocaine attributable to Ruano Yandun’s drug trafficking enterprise.
On November 29, 2017, pursuant to the Foreign Narcotics Kingpin Designation Act, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ruano Yandun and his organization as Specially Designated Narcotics Traffickers (SDNTs) for playing a significant role in international narcotics trafficking. At the time of the designation, OFAC explained that Ruano Yandun’s organization was “a key contributor to the increased cocaine production in the Nariño department of Colombia in recent years.”
The extradition of Ruano Yandun is the result of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a mandatory minimum of 10 years’ imprisonment and up to life in prison.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorney Andrew D. Wang is in charge of the prosecution.
The Defendant:
TITO ALDEMAR RUANO YANDUN
Age: 48
ColombiaE.D.N.Y. Docket No. 17-CR-27 (WFK)
Dialysis Providers Settle Civil Fraud Claims for More Than $9.5 MillionRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, announced agreements with several entities that provide dialysis treatment and services to patients suffering from chronic kidney failure, also known as end-stage renal disease or ESRD. The defendants have agreed to pay a total of more than $9.5 million to settle civil fraud allegations that they caused double-billing to the Medicaid Program for certain medications. Under the terms of the agreements, these providers, including DaVita Healthcare Partners, Inc., Bay Ridge Sunset Park Dialysis Center, Inc., Midwood Chayim Aruchim Dialysis Associates, Inc., New York Artificial Kidney Center, Inc., The Rogosin Institute, for itself and as successor-in-interest to Nephrology Foundation of Brooklyn, Terence Cardinal Cooke Health Care Center, New York Renal Associates, Inc., and Dialysis Clinic, Inc., have paid $3,967,083.38 to the United States under the federal False Claims Act and $5,629,151.20 to New York State under New York State’s False Claims Act. The agreements were approved by United States District Judge Allyne R. Ross.
“No patients, especially those suffering from chronic diseases, should ever be used by health care providers to defraud Medicaid,” stated United States Attorney Peace. “This settlement sends a strong message that our office will vigorously prosecute anyone whose practices jeopardize Medicaid for their own enrichment.”
Mr. Peace thanked the Medicaid Fraud Control Unit of the Office of the New York Sate Attorney General for partnering in the Government’s investigation and resolution of this important case.
The Government’s investigation revealed that, from 2000 through 2010[1], the dialysis clinics and management companies improperly caused claims to be made to Medicaid by retail pharmacies for certain injectable drugs that were administered during the course of dialysis treatment for ESRD. The injectable drugs had already been paid for by Medicaid as part of the composite dialysis payments received by the dialysis clinics and management companies for dialysis treatments.
The civil settlement resolved allegations brought under the qui tam or whistleblower provisions of the federal and state False Claims Acts against these entities. Under the qui tam provisions of these Acts, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam case is captioned United States and the State of New York ex rel. Island Rehabilitative Services, Corp. v. South Brooklyn Nephrology Center, Inc. et al, Civil Action No. 09-CV-1549 (E.D.N.Y).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The government’s case was handled by Assistant United States Attorneys Anjna Kapoor and John Vagelatos.
[1] With regard to defendant Dialysis Clinic, Inc., the alleged conduct occurred between 2006 and 2010.
Four Members of Queens-Based Family Prostitution Business Convicted of Sex Trafficking and Other OffensesRead the Press Release
A federal jury in Brooklyn today returned guilty verdicts on all counts of an indictment charging Luz Elvira Cardona, Roberto Cesar Cid Dominguez, Blanca Hernandez Morales, and Jose Facundo Zarate Morales, who were members of the Queens-based Cid-Hernandez Sex Trafficking Organization, with transportation of minors, sex trafficking, conspiracy to commit Hobbs Act extortion, promotion of prostitution, use of interstate facilities to commit bribery and related conspiracy counts. The verdict followed a four-week, trial before United States District Judge LaShann DeArcy Hall. When sentenced, the defendants each face up to life in prison, except for Cid Dominguez, who faces up to 40 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, announced the verdict.
“Today’s verdict is a milestone in the dismantling of a sex trafficking organization that exploited young women and minors, it is justice for the vulnerable victims who suffered so much pain and suffering, and it is a reckoning for the perpetrators who will soon learn the consequences for their deplorable crimes,” stated United States Attorney Peace. “It is my hope that the convictions bring some measure of solace to the victims on their paths to healing.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, Homeland Security Investigations, New York, the New York City Police Department, and the Putnam County Sherriff’s Office for their outstanding work on the case.
As proven at trial, since approximately 2002, the defendants, all of whom are related by blood or common-law marriage, used force, threats of force, fraud and coercion to cause young women and minor girls from Mexico to engage in prostitution in the United States. Members of the organization pressured the victims, including two minor victims, to travel to the United States with false promises of employment and a better life. When the young girls arrived in New York, they were forced by the defendants to work in prostitution.
During the trial, a victim testified that she was 15 years-old and living in Mexico in 2007 when Cardona, her aunt, offered to pay travel expenses to New York City where the teen could work as a cleaner. The victim did not know that Cardona, along with her partner Zarate Morales, his mother Hernandez Morales, and her partner Cid Dominguez, were operating a prostitution business. After the victim arrived in Queens, Cardona and Zarate Morales brokered a deal with a client to sell her virginity and thereafter she was forced to engage in commercial sex with 20 or more men daily.
Although the Cid-Hernandez Sex Trafficking Organization was based in Queens, young women and minor girls were transported to prostitution clients throughout New York State and Connecticut. The organization controlled “routes,” which were comprised of contact lists of potential clients in specific areas and employed individuals who served as drivers.
Cid Dominguez also bribed Village of Brewster Police Officer Wayne Peiffer with free sexual services to ensure the organization’s protection from law enforcement in his jurisdiction. Peiffer pleaded guilty in April 2022 to conspiracy to commit Hobbs Act extortion and conspiracy to commit bribery. Peiffer is awaiting sentencing.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Lauren Elbert, Gillian Kassner, Rachel A. Bennek and Nicholas Moscow are in charge of the prosecution with the assistance of Paralegal Specialist Ryan Costley.
The Defendants:
LUZ ELVIRA CARDONA (also known as “Lucy”)
Age: 35
Queens, New YorkROBERTO CESAR CID DOMINGUEZ
Age: 60
Queens, New YorkBLANCA HERNANDEZ MORALES (also known as “Nancy,” “Maria Elena,” and “Malena”)
Age: 53
Queens, New YorkJOSE FACUNDO ZARATE MORALES (also known as “El Guero”)
Age: 34
Queens, New YorkE.D.N.Y. Docket No. 21-CR-622 (LDH)
Social Media Influencer Sentenced for Election Interference in 2016 Presidential RaceRead the Press Release
A social media influencer was sentenced today to seven months in prison and fined $15,000 for his role in a conspiracy to interfere with potential voters’ right to vote in the 2016 presidential election.
According to court documents, by 2016, Douglass Mackey, aka Ricky Vaughn, had established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as one of the most significant influencers of the then-upcoming presidential election. Between September 2016 and November 2016, Mackey conspired with other influential Twitter users and with members of private online groups to use social media platforms, including Twitter, to disseminate fraudulent messages that encouraged supporters of presidential candidate Hillary Clinton to “vote” via text message or social media, which was legally invalid.
For example, on Nov. 1, 2016, in or around the same time that Mackey was sending tweets suggesting the importance of limiting “black turnout,” Mackey tweeted an image depicting an African American woman standing in front of an “African Americans for Hillary” sign. The ad stated: “Avoid the Line. Vote from Home,” “Text ‘Hillary’ to 59925,” and “Vote for Hillary and be a part of history.” The fine print at the bottom of the deceptive image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by Hillary For President 2016.” The tweet included the typed hashtag “#ImWithHer,” a slogan frequently used by then-presidential candidate Hillary Clinton. On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “Hillary” or some derivative to the 59925 text number, which had been used in multiple deceptive campaign images that Mackey and his co-conspirators tweeted.
Several hours after tweeting the first image, Mackey tweeted an image depicting a woman seated in a conference room typing a message on her cell phone. This deceptive image was written in Spanish and mimicked a font that the Clinton campaign used in authentic ads. The image also included a copy of the Clinton campaign’s logo and the “ImWithHer” hashtag.
A federal jury in Brooklyn previously convicted Mackey at trial for conspiracy against rights.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.
The FBI investigated the case.
Trial Attorney William J. Gullotta of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Erik D. Paulsen and F. Turner Buford and Paralegal Specialist Shivani Parshad for the Eastern District of New York prosecuted the case.
Social Media Influencer Douglass Mackey Sentenced after Conviction for Election Interference in 2016 Presidential RaceRead the Press Release
Douglass Mackey, was sentenced today by United States District Judge Ann M. Donnelly to 7 months in prison for his role in a conspiracy to interfere with potential voters’ right to vote in the 2016 election for the Office of the President of the United States. Douglass Mackey, also known as “Ricky Vaughn,” was previously convicted of the charge of Conspiracy Against Rights at trial by a federal jury in Brooklyn. Mackey was convicted of the charge in March 2023 following a three-week trial.
Breon Peace, United States Attorney for the Eastern District of New York, Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“One of the foundational rights we hold as Americans, a right that many fought so hard to obtain, is the right to vote. The defendant weaponized disinformation in a dangerous scheme to stop targeted groups, including black and brown people and women, from participating in our democracy,” stated United States Attorney Peace. “This groundbreaking prosecution demonstrates our commitment to prosecuting those who commit crimes that threaten our democracy and seek to deprive people of their constitutional right to vote.”
As proven at trial, by 2016, Mackey had established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as one of the most significant influencers of the then-upcoming presidential election. Between September 2016 and November 2016, Mackey conspired with other influential Twitter users and with members of private online groups to use social media platforms, including Twitter, to disseminate fraudulent messages that encouraged supporters of presidential candidate Hillary Clinton to “vote” via text message or social media which was legally invalid.
For example, on November 1, 2016, in or around the same time that Mackey was sending tweets suggesting the importance of limiting “black turnout,” the defendant tweeted an image depicting an African American woman standing in front of an “African Americans for Hillary” sign. The ad stated: “Avoid the Line. Vote from Home,” “Text ‘Hillary’ to 59925,” and “Vote for Hillary and be a part of history.” The fine print at the bottom of the deceptive image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by Hillary For President 2016.” The tweet included the typed hashtag “#ImWithHer,” a slogan frequently used by Hillary Clinton. On or about and before Election Day 2016, thousands of unique telephone numbers texted “Hillary” or some derivative to the 59925 text number, which had been used in multiple deceptive campaign images tweeted by Mackey and his co-conspirators.
Several hours after tweeting the first image, Mackey tweeted an image depicting a woman seated at a conference room typing a message on her cell phone. This deceptive image was written in Spanish and mimicked a font used by the Clinton campaign in authentic ads. The image also included a copy of the Clinton campaign’s logo and the “ImWithHer” hashtag.
This case was investigated by the FBI.
This case is being prosecuted by Assistant United States Attorneys Erik D. Paulsen and F. Turner Buford of the Eastern District of New York’s Public Integrity Section and Trial Attorney William J. Gullotta of the Department of Justice’s Public Integrity Section.
The Defendant:
DOUGLASS MACKEY
Age: 34
West Palm Beach, FloridaE.D.N.Y. Docket No. 21-CR-80 (AMD)
Brooklyn Gang Member Sentenced for Multiple Armed CarjackingsRead the Press Release
Dieuverson Caille, a/k/a “Savage,” was sentenced today by Second Circuit Judge Denny Chin, sitting by designation, in Brooklyn to 36 months plus an additional 21 years to run consecutively for committing multiple armed carjackings during the height of the COVID-19 pandemic. Caille was convicted in March where it was established that between August 28, 2020 and June 20, 2021, Caille, together with his co-conspirator gang members, carjacked four victims at gunpoint, kidnapped one of them, pistol whipped another, and stole their iPhones and money. Evidence at trial also showed that the defendant was a member of the Eight Tray Gangster Crip and Haitian Loc gangs when he committed these crimes.
Breon Peace, United States Attorney for the Eastern District of New York, and Bryan DiGirolamo, Acting ATF NY Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the verdict.
“The defendant terrorized Brooklyn by committing a string of violent crimes against random, innocent people during the height of the COVID pandemic,” stated United States Attorney Peace. “The city is a safer place because of today’s sentence and underscores that this Office will vigorously prosecute defendants who commit violent crimes.”
“The men and women of ATF NY and the NYPD successfully disrupted this senseless violent string of armed carjackings. Due to the hard work of law enforcement, a reckless individual is effectively removed from terrorizing more innocent people," stated Acting ATF NY Special Agent in Charge Bryan DiGirolamo. "No one should live in fear simply driving down the street. I am thankful for the collaboration of the men and women of ATF NY’s Strategic Pattern Armed Robbery Technical Apprehension group, NYPD’s Brooklyn Robbery Squad & the U.S. Attorney’s Office for the Eastern District of New York. ATF NY will continue to work with our partners to aggressively pursue investigations to remove violent criminals from our communities. Working together is vital to our Violent Crime Reduction Strategy here and throughout NY State.”
“Today’s sentence appropriately punishes a brazen criminal who tormented unsuspecting New Yorkers at the peak of the pandemic, and amid a citywide and nationwide spike in motor vehicle thefts,” stated NYPD Commissioner Edward A. Caban. “Mr. Caille has now been held fully accountable for his actions. And I thank all of the talented NYPD and ATF investigators, and everyone involved from the office of the U.S. Attorney for the Eastern District of New York, for their dedication to ending his particular reign of terror.”
As proven at trial, Caille was involved in a series of violent and armed carjackings. On August 28, 2020, Caille carjacked a victim in Flatbush at gunpoint. Caille and two of his gang members forced the victim into the backseat of his own car, drove the victim to a drive-through ATM fifteen minutes away and attempted to force the victim to withdraw money. The victim escaped by jumping out of the car’s window because he thought if he stayed in the car he could be shot. On September 3, 2020, Caille and several accomplices carjacked a Chevrolet Malibu at gunpoint in Canarsie and attacked an occupant of the car by pistol whipping him. On November 15, 2020, Caille, acting alone, carjacked at gunpoint the driver of a BMW who was working as a rideshare driver in Flatbush. Finally, on June 20, 2021, the defendant, together with at least one other accomplice, carjacked at gunpoint the driver of a Porsche in East New York. The defendant posted pictures of the same make and model Porsche to his Instagram account “cali2savage” three days later.
During the course of the conspiracy, the defendant texted his fellow gang member “I need money” or “I need a V,” which was code for committing robberies or carjackings. The defendant instructed his co-conspirator to text in Creole to evade law enforcement.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Assistant United States Attorneys Sara K. Winik, Ellen H. Sise, and Antoinette N. Rangel are in charge of the prosecution with assistance from Paralegal Specialist Magdalena St. Surin.
The Defendant:
DIEUVERSON CAILLE
Age: 22
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-547 (DC)
Defendant Charged with Operating Sex-Trafficking Ring on Pennsylvania Avenue in Brooklyn Known as the "Penn Track"Read the Press Release
Earlier today, an indictment was unsealed in federal court in Brooklyn federal court charging Douglas Welch, also known as “Paradise,” with sex trafficking by force, sex trafficking conspiracy, interstate prostitution and promotion of prostitution. The charges in the indictment relate to Welch allegedly forcing victims to engage in prostitution, in among other places, a stretch of Pennsylvania Avenue in Brooklyn known as the “Penn Track.” Welch was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge James R. Cho.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the arrest and charges.
“As alleged, Welch has trafficked multiple women for his own financial benefit while boasting about the cruel and brutal violence he has inflicted on the vulnerable victims,” stated United States Attorney Peace. “Running a brazen, open-air commercial sex market in East New York or anywhere else in our district is unacceptable, dangerous to our communities, and especially harmful to women caught in this terrible cycle of abuse. Today’s indictment will hold the defendant accountable in a federal courtroom for his exploitative crimes.”
Mr. Peace also thanked the New York City Department of Corrections, the New York City Human Resources Administration, and the Kings County District Attorney’s Office for their valuable assistance with the case.
“Today’s charges further affirm our unwavering commitment to protecting the survivors of sex trafficking,” stated NYPD Commissioner Caban. “Together with our law enforcement partners, the NYPD will continue to ensure that anyone seeking to profit through the abuse and exploitation of another human being is identified, investigated, and indicted. I commend everyone involved at the FBI and the office of the U.S. Attorney for the Eastern District of New York for their work on this important case.”
The Penn Track has for years operated as an open-air market where Welch and others have forced trafficking victims to earn money for them by engaging in commercial sex acts with customers in cars or nearby hotels.
As alleged in court documents, Welch recruited women to work on his behalf along the Penn Track and used threats and violence to force those victims to engage in commercial sex with customers, and provide him with the profits. Welch routinely threatened his victims with physical violence if they disobeyed his orders, telling one victim, “if you f*** with the pimping, I’m gonna crack your head” and threatening to “slap the s***” out of another victim for not listening to him. He also bragged about knocking unconscious trafficking victims who disrespected him or other traffickers, including describing one instance in which he grabbed a woman by the throat, knocked her onto the sidewalk and then body slammed her for disrespecting another pimp along the Penn Track. Welch struck a victim with a baseball bat for refusing to engage in prostitution after he directed her to do so, telling another sex trafficker that he wanted to leave a “stain on her brain.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the charges, Welch faces a minimum term of 15 years in prison, and up to life imprisonment.
If you are a victim of trafficking—whether by Welch or someone else—and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorney Erin Reid, Kayla Bensing and Joshua Dugan are in charge of the prosecution.
The Defendant:
Douglas Welch (also known as “Paradise”)
Age: 40
Queens, New YorkE.D.N.Y. Docket No. 23-CR-411 (OEM)
American Citizen Sentenced to Life Imprisonment Plus Seventy Years for Providing Material Support to ISIS that Resulted in DeathRead the Press Release
Earlier today, in federal court in Brooklyn, Ruslan Maratovich Asainov, a U.S. citizen and former resident of Bay Ridge, Brooklyn, was sentenced by United States District Judge Nicholas G. Garaufis to life imprisonment plus seventy years for providing material support to ISIS, a foreign terrorist organization, that resulted in death. Asainov was also sentenced to concurrent terms of 20 years’ imprisonment on related convictions of conspiracy to provide material support to ISIS and obstruction of justice, and 10 years’ imprisonment for receipt of military-type training from ISIS. Today’s sentence was imposed by United States District Judge Nicholas G. Garaufis. Asainov was convicted by a federal jury after a three-week trial in February 2023.
Breon Peace, United States Attorney for the Eastern District of New York; Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations New York (HSI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today’s sentence rightly holds Asainov responsible for the carnage he inflicted as a sworn member of ISIS and protects the world community from this avowed killer,” stated United States Attorney Peace. “The defendant committed his life to that terrorist organization and became a lethal sniper for ISIS in Syria, training many other ISIS members to shoot to kill as ISIS waged its brutal, barbaric campaign. To this day, the defendant maintains his unrepentant allegiance to that hateful cause. Like this defendant now knows, anyone who takes up arms in service of ISIS and causes death and destruction will be prosecuted to the fullest extent of the law by this Office.”
“Mr. Asainov abandoned his family and country to fight for ISIS and train others to carry out its reign of terror, a cause to which he remains devoted to this day,” said Assistant Attorney General for National Security Matthew G. Olsen. “Now, he is being held accountable for his crimes with a sentence of life in prison. The Department of Justice is committed to bringing to justice those who would aid such murderous terrorist organizations.”
“The world is undoubtedly safer with Ruslan Maratovich Asainov behind bars," stated HSI New York Special Agent-in-Charge Arvelo. “Mr. Asainov pledged himself to ISIS, committed unconscionable acts on behalf of the terrorist group, and bragged about how he taught nearly 100 aspiring snipers how to kill. He further aligned himself to the Islamic State by covering his federal prison cell wall with an improvised ISIS flag. HSI New York is proud to stand with our partners to ensure his atrocities end here.”
“Today’s sentence is a just and fair punishment for a naturalized U.S. citizen who forsook the country that took him in,” stated NYPD Commissioner Caban. “Instead of embracing all that America had to offer him and his family in New York City, he instead pledged allegiance to a foreign terrorist organization. This outcome serves as a warning to those who intend to actively promote or carry out the violent objectives of such groups: The NYPD and our law enforcement partners around the globe will never stop working to identify and bring to justice anyone who so clearly considers our nation their sworn enemy.”
Between December 2013 and March 2019, Asainov provided and conspired to provide material support and resources in the form of personnel, including himself, training, and expert advice and assistance, to a foreign terrorist organization, namely ISIS, knowing that ISIS was a designated foreign terrorist organization that had engaged in terrorist activity and terrorism. Asainov also received military-type training from ISIS, in violation of federal law.
On December 24, 2013, Asainov abandoned his wife and daughter in Brooklyn, and boarded a flight at JFK International Airport, bound for Istanbul, Turkey. Along with a co-conspirator, Mirsad Kandic, by early January 2014, Asainov traveled to northern Syria in the area of Aleppo, and joined ISIS as a fighter. Kandic was arrested in Sarajevo, Bosnia and Herzegovina, convicted of conspiracy to provide material support to ISIS resulting in death by a federal jury in Brooklyn in May 2022, and sentenced to life in prison in July 2023.
Over the course of approximately five years fighting on behalf of ISIS, Asainov fought in numerous battles against ISIS enemies, including engagements at Kobani, Tabqa, Raqqa, Dayr Az Zawr, and ISIS’s last stand in Syria at Baghouz, in March 2019. Asainov received training in how to use automatic rifles, machine guns and rocket-propelled grenades. In Tabqa, in mid-2014, he volunteered to train as a sniper. Over time, Asainov became a sniper trainer or “emir” on behalf of ISIS, estimating that he taught nearly 100 students. A former U.S. Navy SEAL scout sniper testified that the defendant’s sniper training course was consistent with what the former SEAL would expect to be taught in a sniper training program.
From Syria, the defendant attempted to recruit another individual to travel from the United States to Syria to fight for ISIS, and sought to obtain funds to purchase a scope for his rifle from the same person. The defendant also told his estranged wife that he was fighting on behalf of ISIS, described by him in a recorded January 2015 voicemail as “the most atrocious terrorist organization in the world that ever existed.” Asainov’s estranged wife testified that he sent her a photograph of three dead fighters, one of whom was wearing a patch reading, “Islamic State of Iraq and al-Sham,” i.e., ISIS, in Arabic script.
Asainov was captured in Syria after ISIS’s last stand at Baghouz, near the Syria-Iraq border. Just before his capture, Asainov discarded his rifle and destroyed his cell phone.
Asainov admitted to agents from the FBI’s Joint Terrorism Task Force that he had fought in numerous battles on behalf of ISIS as a warrior and sniper, serving in several different katibas or ISIS fighting brigades. In recorded phone calls to his mother from facilities operated by the Bureau of Prisons (“BOP”), the defendant told her that he was carrying out Allah’s orders when he waged jihad and killed for ISIS, that he intended to return to waging jihad if released, and that he would fight until he “meet[s] Allah,” i.e., until his death. In September 2020, staff at a BOP facility confiscated a makeshift ISIS flag affixed to Asainov’s cell wall. The defendant had filled in an 8.5” x 11” sheet of paper with black ink and Arabic writing in the design of the ISIS flag. During his trial, the defendant reiterated his allegiance to ISIS to court personnel, stating that ISIS would rise again.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, J. Matthew Haggans, Nicholas J. Moscow, and Nina C. Gupta are in charge of the prosecution, with assistance provided by Trial Attorney Jenny Levy of the Counterterrorism Section of the National Security Division of the Department of Justice and Paralegal Specialists Wayne Colon and Mary Clare McMahon.
The Justice Department’s Office of International Affairs, the FBI’s Legal Attachés abroad, and foreign authorities in multiple countries on multiple continents provided critical assistance in this case. The Bosnian and Herzegovinian authorities and the FBI Legal Attaché Office in Sarajevo provided extraordinary assistance in the investigation and prosecution. The Ministry of Justice for the Republic of Finland, the Stuttgart Police Department and Federal Office of Justice in the Federal Republic of Germany, the Department of Justice & Constitutional Development in the Republic of South Africa, the Prosecutor General’s Office in Ukraine, and the FBI’s Legal Attaché Offices for those countries provided valuable assistance in the investigation.
The Defendant:
RUSLAN MARATOVICH ASAINOV (also known as “Suleiman Al-Amriki” and “Suleiman Al-Kazakhi”)
Age: 46
Bay Ridge, BrooklynE.D.N.Y. Docket No. 19-CR-402 (NGG)
Related Defendants:
MIRSAD KANDIC
Age: 42
Brooklyn, New York; KosovoE.D.N.Y. Docket No. 17-CR-449 (NGG)
Two Defendants Indicted for Trafficking Protected BirdsRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an eight-count indictment was unsealed charging John Waldrop and Toney Jones with conspiracy to smuggle goods into the United States, smuggling goods into the United States, violating the Endangered Species Act (ESA), and money laundering conspiracy. The defendants surrendered this morning in Atlanta and will make their initial appearances this afternoon in U.S. District Court for the Northern District of Georgia. The defendants will be arraigned via teleconference in federal court in Brooklyn on October 16, 2023.
The defendants are alleged to have illegally imported hundreds of taxidermy bird mounts and thousands of eggs into the United States between January 2016, and December 2020. U.S. law and regulations require that importers declare wildlife to the U.S. Fish and Wildlife Service (USFWS) and Customs authorities. Permits are also required for wildlife protected by the ESA, Migratory Bird Treaty Act (MBTA) and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Breon Peace, United States Attorney for the Eastern District of New York, Todd Kim, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division (ENRD, and Edward Grace, Assistant Director, U.S. Fish and Wildlife Service, Office of Law Enforcement (USFWS), announced the arrests and charges.
“It is in our national and global interest to enforce federal laws and treaties that protect endangered birds from the harm of alleged profiteers like the defendants, and the Eastern District of New York will do so” stated United States Attorney Peace.
Mr. Peace also thanked The U.S. Postal Inspection Service and the Alabama Department of Conservation and Natural Resources for their assistance with the investigation.
“The Endangered Species Act is a vital law in the fight against international trafficking of protected wildlife,” stated Assistant Attorney General Kim. “Rare and endangered birds have important roles in their habitats, and we are committed to preventing and deterring their unlawful removal.”
“This investigation highlights the immense pressure illegal trade places on imperiled bird species around the world, and the Service's commitment to upholding laws and treaties that prevent the exploitation of foreign and domestic species,” stated USFWS Assistant Director Grace. “We hope this indictment sends a clear message that our investigators will work tirelessly to seek justice for poached wildlife.”
According to the indictment, Waldrop and Jones used online sales sites such as eBay and Etsy to buy taxidermy birds and eggs from around the world, including Germany, Hungary, Iceland, Italy, Lithuania, Malta, Russia, South Africa, the United Kingdom and Uruguay. Waldrop and Jones imported and collected many species of protected birds, such as canary, dipper, duck, eagle, falcon, grouse, gull, hawk, heron, hoopoe, kestrel, kinglet, lapwing, murre, owl, parrot, pochard, rail, teal, snipe, spoonbill, vulture and woodpecker.
In addition to the conspiracy, the indictment charges Waldrop and Jones with importing three packages containing taxidermy birds and eggs in 2020 through John F. Kennedy International Airport in violation of smuggling and ESA laws. The packages contained a Levant sparrowhawk, a grasshopper buzzard-hawk, two gull eggs, two murre eggs and one unidentified bird egg. The final count of the indictment alleges that Waldrop and Jones conspired to commit money laundering by sending funds out of the United States to finance bird smuggling. The indictment also seeks forfeiture of 779 bird mounts and 2,594 eggs alleged to have been illegally imported into the United States.
As alleged, Waldrop and Jones made requests to wildlife dealers for particular bird species, including species that were protected under CITES and the MBTA. In turn, those dealers notified Waldrop and Jones when a bird of that species had been killed and was available for purchase. Waldrop and Jones also communicated regularly with dealers about new birds available for purchase. The estimated value of the wildlife purchased, transported, imported, and possessed by the defendants was at least $1.2 million.
The CITES treaty regulates trade in endangered or threatened species through permit requirements. The United States and 183 other countries are signatories to the CITES treaty. The MBTA implements treaties with Canada, Japan, Mexico, and Russia to protect many native U.S. bird species that also have habitats in those countries.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the smuggling and money laundering charges, Waldrop and Jones face up to 20 years in prison and a $250,000 fine. The conspiracy charge carries a five-year maximum sentence, and the ESA is punishable by six months in prison.
Assistant United States Attorney Anna Karamigios of the Eastern District of New York and Senior Trial Attorney Ryan Connors of ENRD’s Environmental Crimes Section are in charge of the prosecution.
The Defendants:
JOHN WALDROP
Age: 74
Cataula and Columbus, GeorgiaTONEY JONES
Age: 53
Eufala, AlabamaE.D.N.Y. Docket No.: 23-CR-378 (RPK)
Two Defendants Convicted of Murder for Hire in Fatal Shooting of Perceived Business Rival in QueensRead the Press Release
Today, a federal jury in Brooklyn returned a guilty verdict against Qing Ming Yu, also known as “Allen” and Zhe Zhang, also known as “Zack,” on both counts of an indictment charging them with murder-for-hire and murder-for-hire conspiracy in connection with the February 12, 2019 killing of 31-year-old Xin “Chris” Gu, outside of a karaoke bar in Queens. The verdict followed a two-week trial before United States District Judge Carol Bagley Amon. When sentenced, each defendant faces a mandatory term of life in prison.
Breon Peace, United States Attorney for the Eastern District of New York, announced the verdict.
“The victim worked long hours to start his own company only to be murdered execution-style by these treacherous defendants who thought nothing of snuffing out a human life as part of their own business plan,” stated United States Attorney Peace. “Thanks to the jury, and the outstanding work of the prosecutors, NYPD detectives and FBI special agents, justice has been served and the defendants will be deservedly punished for this vicious killing.”
As proven at trial, Allen Yu was the president of Amaco, a multi-million dollar construction company that renovated apartments in New York City. In 2015, Xin Gu joined Amaco as a project manager. Although Amaco’s business nearly quadrupled after he joined the company, Xin Gu became concerned about the company’s financial viability and resigned in 2018 to start his own property development company called KG Management. After Xin Gu’s departure, several clients and employees also cut ties with Qing Ming Yu’s business. Multiple companies took their lucrative projects from Amaco to KG Management, including one project valued at $1,000,000. Enraged at Xin Gu’s perceived disloyalty, Qing Ming Yu hired co-conspirator You You and Zhe Zhang to kill Xin Gu in exchange for payment. Zhang in turn hired another co-conspirator, Antony Abreu, to assist in carrying out the murder.
On the evening of February 11, 2019, into the following morning, Xin Gu’s new company hosted a celebration of the Lunar New Year at Lake Pavilion restaurant in Flushing. After that dinner, Xin Gu and a smaller group went to a karaoke bar, Grand Slam KTV on Fowler Avenue. The hit team learned of the party and with You You acting as a lookout and Zhe Zhang serving as the getaway driver, Abreu allegedly shot the victim multiple times as he waited for an Uber, killing him. Over the next three months, Qing Ming Yu paid $150,000 to You You for the murder.
You You pleaded guilty to murder-for-hire conspiracy in June 2023 and is awaiting sentencing. Abreu is awaiting trial.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Devon Lash, Nadia E. Moore and Gabriel Park are in charge of the prosecution with the assistance of Paralegal Specialist Elizabeth Reed.
The Defendants:
QING MING YU (also known as “Allen”)
Age: 55
Oyster Bay, New YorkZHE ZHANG (also known as “Zack”)
Age: 35
Arcadia, California and Flushing, New YorkE.D.N.Y. Docket No. 22-CR-208 (CBA)
MS-13 Gang Members Indicted for Two Murders on Long IslandRead the Press Release
An 11-count indictment was unsealed on October 4, 2023 in federal court in Central Islip charging Carlos Humberto Aquino-Hernandez, also known as “Caprichoso” and “Flaco” (“Aquino-Hernandez”), who is a member of the Coronados Locos Salvatruchas subgroup or “clique” of the MS-13, the violent transnational criminal organization La Mara Salvatruchas, and Gerson Hernandez, also known as “Steven Jefferson,” “Jeffrey,” “Serio,” “Serioso” and “Necio,” who is a member of the Hempstead Locos Salvatruchas clique of the MS-13, with multiple racketeering offenses in connection with two murders, a narcotics trafficking conspiracy, as well as with related charges of murder, conspiracy to commit murder, firearms offenses, and narcotics trafficking offenses.
Hernandez was arraigned this afternoon before United States Magistrate Judge Lee G. Dunst at the federal courthouse in Central Islip and was ordered detained pending trial. On October 6, 2023, Aquino-Hernandez was ordered removed in custody from the District of Maryland and will be arraigned in the Eastern District of New York at a later date.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in Charge, Federal Bureau of Investigation, New York Field Office (“FBI”), and Patrick J. Ryder, Commissioner, Nassau County Police Department (“NCPD”) announced the indictment and charges.
“The defendants allegedly committed two murders in furtherance of the MS-13 enterprise with all the gang’s hallmarks of senseless, brutal violence that endangers the entire community as evinced by unleashing gunfire outside a McDonald’s in broad daylight near a mother walking with her child,” stated United States Attorney Peace. “The defendants fleeing to another state proved futile thanks to the outstanding efforts of law enforcement to hold them accountable now in a federal courtroom on Long Island.”
Mr. Peace expressed his appreciation to the members of the FBI’s Long Island Gang Task Force, the NCPD, and the Nassau County District Attorney’s Office; as well as to the members of the FBI’s Baltimore Division and Cross Border Task Force, the Prince George’s County Police Department, the Montgomery County Police Department, the Montgomery County Division of the Maryland National Capital Park Police, and the United States Attorney’s Office for the District of Maryland for their tremendous assistance and partnership in this case.
“The actions of Aquino-Hernandez and Hernandez remind us that gangs are responsible for a significant percentage of violent crime in many jurisdictions, putting innocent people at risk as they avenge their rivals. The violence caused by MS-13 has terrorized our communities for far too long, and the FBI is committed to dismantling this violent gang and putting an end their atrocities once and for all,” stated FBI Assistant Director-in-Charge Smith.
The July 19, 2022 Murder of Walter Ochoa
Walter Ochoa was targeted by MS-13 members who suspected him of being a member of a rival street gang. Ochoa’s murder was also committed in retaliation for the killing of an MS-13 member 11 days earlier which the MS-13 blamed on the 18th Street gang. On the evening of July 19, 2022, Ochoa was with another individual in Uniondale Park when they were approached by the defendants and a third MS-13 member, who were armed with a .45 caliber handgun and at least one knife. After they shot Ochoa to death and stabbed him in the neck and abdomen, the three MS-13 members fled the park.
The September 14, 2022 Murder of Hector Valencia Gomez
Surveillance footage from the McDonald’s restaurant revealed that on the afternoon of September 14, 2022, Hernandez and an MS-13 associate were being chased by Gomez towards a dumpster next to the McDonald’s drive-thru. Hernandez waved over Aquino-Hernandez who was armed with a 9-millimeter handgun. Aquino-Hernandez fired at Gomez, who was running in between cars lined up at the drive-thru. Gomez stumbled several steps before collapsing, after which point Aquino-Hernandez fired additional rounds at Gomez as he lay on the pavement. The MS-13 associate also struck Gomez in the arm with a large knife. The surveillance video also shows a mother and her small child, several feet away from the attack, running for cover during the shooting. Hernandez and Aquino-Hernandez were later arrested in Maryland where they had traveled to avoid apprehension for the murders.
Finally, the defendants are charged with conspiring to distribute cocaine and marijuana on Long Island, the proceeds of which were used to help finance the MS-13’s criminal operations, including purchasing firearms, ammunition and other weapons, and sending money to MS-13 leadership in Central America.
The indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras and Mexico, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders, and assaults. Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 65 murders in the Eastern District of New York, and it has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, the NCPD, the Suffolk County Police Department, the Nassau County Sheriff’s Department, the Suffolk County Sheriff’s Office, the Suffolk County Probation Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department, and the New York State Department of Corrections and Community Supervision.
If convicted, each defendant faces up to life in prison, or the possibility of the death penalty. The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Megan E. Farrell, Justina L. Geraci, and Paul G. Scotti from the Office’s Long Island Criminal Division.
The Defendants:
CARLOS HUMBERTO AQUINO-HERNANDEZ ( also known as “Caprichoso” and “Flaco”)
Age: 22
Uniondale, New York and Baltimore, MarylandGERSON HERNANDEZ (also known as “Steven Jefferson,” “Jeffrey,” “Serio,” “Serioso” and “Necio”)
Age: 22
Hempstead, New YorkE.D.N.Y. Docket No. 23-CR-369 (JMA)
Justice Department Announces Indictment Against Two Men for Trafficking Protected BirdsRead the Press Release
The Justice Department today announced the unsealing of an indictment charging Dr. John Waldrop, 74, of Cataula, Georgia, and Toney Jones, 53, of Eufala, Alabama, on conspiracy, smuggling, Endangered Species Act (ESA) and money laundering charges. An arraignment in federal court is scheduled for Oct. 16.
The indictment alleges that Waldrop and Jones illegally imported hundreds of taxidermy bird mounts and thousands of eggs into the United States between Jan. 1, 2016, and Dec. 10, 2020; they did not import any live birds. U.S. law and regulations require that importers declare wildlife to the U.S. Fish and Wildlife Service (USFWS) and Customs authorities. Permits are also required for wildlife protected by the ESA, Migratory Bird Treaty Act (MBTA) and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
“The Endangered Species Act is a vital law in the fight against international trafficking of protected wildlife,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “Rare and endangered birds have important roles in their habitats, and we are committed to preventing and deterring their unlawful removal.”
“It is in our national and global interest to enforce federal laws and treaties that protect endangered birds from the harm of alleged profiteers like the defendants, and the Eastern District of New York will do so,” said U.S. Attorney Breon Peace for the Eastern District of New York.
“This investigation highlights the immense pressure illegal trade places on imperiled bird species around the world, and the Service's commitment to upholding laws and treaties that prevent the exploitation of foreign and domestic species,” said Assistant Director Edward Grace of the USFWS Office of Law Enforcement. “We hope this indictment sends a clear message that our investigators will work tirelessly to seek justice for poached wildlife.”
According to the indictment, Waldrop and Jones used online sales sites such as eBay and Etsy to buy birds and eggs from around the world, including Germany, Hungary, Iceland, Italy, Lithuania, Malta, Russia, South Africa, the United Kingdom and Uruguay. Waldrop and Jones imported and collected myriad species of protected birds, such as canary, dipper, duck, eagle, falcon, grouse, gull, hawk, heron, hoopoe, kestrel, kinglet, lapwing, murre, owl, parrot, pochard, rail, teal, snipe, spoonbill, vulture and woodpecker.
In addition to the conspiracy, the indictment charges Waldrop and Jones with importing three packages containing birds and eggs in 2020 through John F. Kennedy International Airport in violation of smuggling and ESA laws. The packages contained a Levant sparrowhawk, a grasshopper buzzard-hawk, two gull eggs, two murre eggs and one unidentified bird egg. The final count of the indictment alleges that Waldrop and Jones conspired to commit money laundering by sending funds out of the United States to finance bird smuggling. The indictment also seeks forfeiture of 779 bird mounts and 2,594 eggs alleged to have been illegally imported into the United States.
The maximum sentence for the smuggling and money laundering charges is 20 years in prison and a $250,000 fine, or twice the economic gain or loss. The conspiracy charge carries a five-year maximum sentence, and the ESA is punishable by six months in prison.
The CITES treaty regulates trade in endangered or threatened species through permit requirements. The United States and 183 other countries are signatories to the CITES treaty, which regulates trade in endangered or threatened species through permit requirements. The MBTA implements treaties with Canada, Japan, Mexico and Russia to protect many native U.S. bird species that also have habitats in those countries.
The USFWS’s Office of Law Enforcement in Valley Stream, New York, conducted the investigation as part of Operation Final Flight. The operation focused on the trafficking of protected birds into the United States. The U.S. Postal Inspection Service and Alabama Department of Conservation and Natural Resources assisted with the investigation.
The government is represented by Senior Trial Attorney Ryan Connors of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Anna Karamigios for the Eastern District of New York.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Former Senior Fiscal Officer for Non-Profit Organization Charged with Multi-Million Dollar Embezzlement SchemeRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Marcia Joseph with wire fraud in connection with her embezzlement of approximately $2.3 million from her employer, a non-profit organization (Company-1) that provides employment and education services for those in need. Joseph was arrested earlier today and made her initial appearance this afternoon before United States Magistrate Judge Peggy Kuo. The defendant was released on a $50,000 bond.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), announced the arrest and charges.
“As alleged, Joseph lined her pockets with millions of dollars that she stole from a charity,” stated United States Attorney Peace. “Money that should have gone to support those with employment and educational needs instead was used to pay for the defendant’s personal expenses, including mortgage payments, spa treatments, home remodeling, and landscaping. Today’s charges send a message to those entrusted with positions of trust that if you abuse that trust for personal gain, you will be arrested and prosecuted.”
“Depleting resources procured for those with special needs is among the most egregious of financial crimes. As we allege today, Joseph did just that by embezzling millions of dollars from the company for which she worked, diverting money away from programs for those in need and right into her pockets. We remind the public that those who engage in similar schemes will be met with a similar fate,” stated FBI Assistant Director-in-Charge Smith.
“This former senior fiscal officer at a Brooklyn-based nonprofit embezzled more than $2.3 million by submitting to the nonprofit fictitious invoices for services, some of which purportedly related to City contracts, for payment to an entity that the defendant created and controlled, according to the criminal complaint,” stated DOI Commissioner Strauber. “As charged, the defendant used her position of trust and responsibility to line her pockets at the expense of a nonprofit that receives City funding and provides critical services to vulnerable New Yorkers. I thank the FBI and the U.S. Attorney's Office for the Eastern District of New York for their partnership in this investigation and their commitment to protect important public resources from fraud and abuse.”
According to the complaint, Joseph was the senior fiscal officer of Company-1, a 501(c)(3) non-profit organization located in Brooklyn, New York that provides comprehensive services to support employment opportunities for persons with emotional, developmental, and/or physical disabilities, and those who are economically disadvantaged. Joseph set up a company called Prestige Business Services (“Prestige”), which purported to provide specialized services to other companies on behalf of Company-1. In truth, Prestige performed no work, and instead was used by Joseph for the exclusive purpose of embezzling more than $2.3 million from Company-1 over a 16-year period. Joseph used the money paid by Company-1 to Prestige to pay for numerous personal expenses, including approximately $235,000 in mortgage payments; 207,000 in credit card payments; $98,000 in car payments; $45,000 in Amazon expenses; and various other personal items, such as home remodeling, spa treatment, landscaping expenses, and luxury goods. Joseph also withdrew nearly $100,000 in cash, disbursed approximately $16,000 to friends and family, and issued approximately $50,000 in Prestige checks to herself.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Eric Silverberg is in charge of the prosecution with assistance from Paralegal Specialists Elizabeth Reed and Melissa Bennett.
The Defendant:
MARCIA JOSEPH (also known as “Marcia James,” “Marcia Lewis,” and “Marcia Peters”)
Age: 57
Baldwin, New YorkE.D.N.Y. Docket No. 23-MJ-883
Former Head of Boro Park Shomrim Society Sentenced to More Than 17 Years in Prison for Transporting a 15-Year-Old Girl with Intent to Engage in Sexual ActivityRead the Press Release
Earlier today, in federal court in Brooklyn, Jacob Daskal, the former head of the Boro Park Shomrim Society (the “Shomrim”), a private, Orthodox Jewish crime-patrol group associated with the New York Police Department, was sentenced by United States District Judge Nicholas G. Garaufis, to 210 months in prison and a $250,000 fine for transporting a minor with intent to engage in criminal sexual activity. Daskal pleaded guilty to the charge in July 2023. As part of the sentence, Daskal is required to register as a sex offender.
Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Daskal used his position of power to inflict serious mental, emotional and physical harm on a vulnerable underaged victim, who belonged to the same community he promised to serve and protect,” stated United States Attorney Peace. “Today’s sentence brings some measure of justice for the brave victim.”
Mr. Peace also expressed his appreciation to the Kings County District Attorney’s Office and the New York City Police Department for their assistance with the investigation.
As set forth in court filings and statements at court proceedings, in the spring of 2017, as a result of his position with the Shomrim, Daskal was introduced to a 15-year-old girl who was having issues with her family and whom he took into his home and then groomed for sex. Between August and November 2017, Daskal, then 58 years-old, subjected the 15-year-old victim to sexual acts.
During the summer of 2017, the sexual conduct occurred primarily at Daskal’s house in Brooklyn, New York and at his summer house in South Fallsburg, New York. Daskal frequently transported the victim between those locations by way of New Jersey. At the end of August, Daskal, his family and the victim returned full-time to his house in Brooklyn where the abuse continued. As the school year started, the defendant helped the victim find a new school in Chicago, Illinois, and, in October 2017, she moved there to attend that school and live with another family. While the victim was in Chicago, Daskal communicated with the victim via text message and over Skype video chat. On November 5, 2017, Daskal traveled to Chicago to visit the victim. Daskal booked a hotel room in Chicago, and he brought the victim to the hotel for sex. He returned to New York that evening.
Throughout the abuse, Daskal instructed the victim to delete their communications and warned her not to tell anyone about their sexual relationship. Daskal also used his position as a leader in their community to quiet the victim, bragging about his connections to law enforcement and warning her that it would ruin her life if she told anyone about their relationship. In fact, the victim was expelled from her religious school after disclosing her relationship with Daskal to the school principal.
The government’s case is being handled by the office’s Civil Rights Section. Assistant United States Attorneys Erin Reid and Genny Ngai are in charge of the prosecution with assistance from Litigation Analyst Ryan Costley.
The Defendant:
JACOB DASKAL
Age: 64
Brooklyn, New YorkE.D.N.Y. Docket No. 21-CR-110 (NGG)
Long Island Man Indicted for Smuggling Protected Birdwing ButterfliesRead the Press Release
A six-count indictment was unsealed today in federal court in Brooklyn charging Charles Limmer with conspiracy to smuggle wildlife into the United States, smuggling wildlife into and out of the United States, and violations of the Lacey Act’s prohibitions on falsely labeling and trafficking in wildlife. Limmer allegedly trafficked numerous deceased specimens of protected butterflies commonly referred to as “birdwings” due to their exceptional size, angular wings and bird-like flight. Limmer will be arraigned at a later date.
Breon Peace, United States Attorney for the Eastern District of New York, and Paul Chapelle, Resident Agent-in-Charge, U.S. Fish and Wildlife Service, Valley Stream Division (FWS), announced the charges.
Mr. Peace also thanked the U.S. Postal Inspection Service and U.S. Customs and Border Protection for their assistance with the investigation.
Limmer operated a commercial business (the “Limmer Business”) importing, exporting, purchasing, and selling wildlife, including protected species of butterflies. In 2016, the Limmer Business obtained a license to import and export wildlife from the FWS. The FWS suspended the license in October 2022.
U.S. law and regulations require that commercial importers and exporters of wildlife have a license and declare wildlife to the FWS. The restrictions apply to live and dead wildlife specimens, as well as the skins, parts and products made in whole or in part from listed species. Additional documents are also required for wildlife protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), including birdwing butterflies. The Lacey Act also requires that wildlife shipments be accurately labeled and prohibits trafficking in wildlife that an individual knows was transported unlawfully.
As alleged in the indictment, between October 2022 and September 2023, Limmer illegally imported and exported over $200,000 worth of shipments of deceased wildlife specimens. Limmer sold the unlawfully imported wildlife on Internet platforms to customers located around the world. To conceal the scheme, Limmer directed his co-conspirators to label the shipments of wildlife as “decorative wall coverings,” “origami paper craft” and “wall decorations.” He also noted to one co-conspirator, “Screw USFWS[….] They are a gang of Orangutans.”
The indictment also seeks forfeiture of over 1,000 butterflies, moths and other insects alleged to have been illegally trafficked.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of smuggling, Limmer faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Sean M. Sherman is in charge of the prosecution with the assistance of Paralegal Specialist Stephanie Heyward.
The Defendant:
CHARLES LIMMER
Age: 75
Commack, New YorkE.D.N.Y. Docket No. 23-CR-405 (LDH)
Leader and Two Members of Brooklyn-Based Real Ryte Gang Convicted of Violent Racketeering OffensesRead the Press Release
Earlier today, Semaj Smith, also known as “Bam Bam” and “Real Ryte Sport,” a member of the Brooklyn-based street gang Real Ryte, pleaded guilty at the federal courthouse in Brooklyn to racketeering conspiracy and brandishing a firearm in furtherance of a crime of violence. Smith’s guilty plea was preceded by those of co-defendants Dajahn McBean, also known as “Jeezy Mula,” who is the leader of Real Ryte, and Real Ryte member Mark Waiters, also known as “Telly.” The three defendants pleaded guilty in connection with a superseding indictment stemming from Real Ryte’s gang war with the Breadgang crew of the 5-9 Brims, a subset of the Bloods, including a shooting in which Real Ryte members and an associate wounded an innocent bystander they mistook for a member of the rival crew.
Today’s proceeding took place before United States District Judge Hector Gonzalez. When sentenced, Smith and Waiters each face up to life in prison, and McBean faces up to 20 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty pleas.
“The defendants admitted that Real Ryte carried out violent crimes and committed acts of fraud, leaving some victims destitute and others shot.” stated United States Attorney Peace. “These types of organized criminal groups inflict grievous harm on their communities and will not be tolerated.”
Mr. Peace expressed his appreciation to the New York City Police Department for outstanding work and assistance in this investigation.
According to court filings and facts presented during the plea proceedings, between 2015 and 2018, Real Ryte was a violent street gang that operated in Brooklyn. Real Ryte members committed acts of violence, including murder and assault, and also engaged in bank fraud and wire fraud while committing other serious crimes.”
During the charged period, Real Ryte was engaged in a violent conflict with members of a rival crew known as the “Breadgang,” whose members also operated in Brooklyn. The gang war led to a series of shootings between Real Ryte and Breadgang, including the murder of Sean Peart, a Real Ryte member, a crime for which Marvin Pippins, a Breadgang member, was convicted following trial in the Eastern District of New York. Following Peart’s death, the defendants and other members of Real Ryte sought to retaliate against Pippins and other Breadgang members. On January 3, 2017, the defendants learned that a Breadgang member could be found in lower Manhattan, and, at McBean’s direction, Smith, Waiters and a co-conspirator traveled there to shoot and kill him. However, the defendants mistakenly shot an innocent person they mistook for their intended target, seriously injuring the victim before fleeing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Garen Marshall, Joy Lurinsky and Rebecca Schuman are in charge of the prosecution, with assistance from Paralegal Specialists Cleon Thomas and Abiodun Ojo.
The Defendants:
DAJAHN MCBEAN (also known as “Jeezy Mula”)
Age: 28
Brooklyn, New YorkSEMAJ SMITH (also known as “Bam Bam” and “Real Ryte Sport”)
Age: 30
Brooklyn, New YorkMARK WAITERS (also known as “Telly”)
Age: 26
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-260 (S-1) (HG)
Congressman George Santos Charged in Campaign Finance Fraud SchemeRead the Press Release
A federal grand jury in Central Islip, New York, returned a superseding indictment today charging George Anthony Devolder Santos (George Santos), 35, a U.S. Congressman representing the Third District of New York, with one count of conspiracy to commit offenses against the United States, two counts of wire fraud, two counts of making materially false statements to the Federal Election Commission (FEC), two counts of falsification of records submitted to the FEC, two counts of aggravated identity theft, and one count of access device fraud. Santos was previously charged with an additional seven counts of wire fraud, three counts of money laundering, one count of theft of public funds, and two counts of making materially false statements to the U.S. House of Representatives in the original indictment.
According to court documents, Santos, who was elected to Congress last November and sworn in as the U.S. Representative for New York’s Third Congressional District on Jan. 7, engaged in two fraudulent schemes, in addition to the multiple fraudulent schemes alleged in the original indictment.
The Party Program Scheme
According to the allegations in today’s superseding indictment, during the 2022 election cycle, Santos was a candidate for the U.S. House of Representatives in New York’s Third Congressional District. Nancy Marks was the treasurer for his principal congressional campaign committee. During that election cycle, Santos and Marks allegedly devised and executed a fraudulent scheme to obtain money for the campaign by submitting materially false reports to the FEC on behalf of the campaign, in which Santos and Marks inflated the campaign’s fundraising numbers for the purpose of misleading the FEC, a national party committee, and the public.
Specifically, the purpose of the scheme was to ensure that Santos and his campaign qualified for a program that the national party committee administered, pursuant to which the national party committee would provide financial and logistical support to Santos and his campaign committee. To qualify for the program, Santos had to demonstrate, among other things, that his congressional campaign had raised at least $250,000 from third-party contributors in a single quarter.
To create the public appearance that his campaign had met that financial benchmark and was otherwise financially viable, Santos and Marks allegedly agreed to falsely report to the FEC that at least 10 family members of Santos and Marks had made significant financial contributions to the campaign, when Santos and Marks both knew that these individuals had neither made the reported contributions nor given authorization for their personal information to be included in such false public reports. In addition, understanding that the national party committee relied on FEC fundraising data to evaluate candidates’ qualification for the program, Santos and Marks allegedly agreed to falsely report to the FEC that Santos had loaned the campaign significant sums of money, including in one instance a $500,000 loan, when, in fact, Santos had not made the reported loans and, at the time the loans were reported, did not have the funds necessary to make such loans.
Through the execution of this scheme, Santos and Marks ensured that Santos met the necessary financial benchmarks to qualify for the program that the national party committee administered. As a result of qualifying for the program, the congressional campaign received financial support.
The Credit Card Fraud Scheme
As alleged in the superseding indictment, between approximately December 2021 and August 2022, Santos devised and executed a fraudulent scheme to steal the personal identity and financial information of contributors to his campaign. He then allegedly charged contributors’ credit cards repeatedly, without their authorization. Because of these unauthorized transactions, funds were transferred to Santos’ campaign, to the campaigns of other candidates for elected office, and to his own bank account. To conceal the true source of these funds and to circumvent campaign contribution limits, Santos falsely represented that some of the campaign contributions were made by other persons, such as his relatives or associates or other contributors, rather than the true cardholders. Santos did not have authorization to use the cardholders’ names in this way.
For example, in December 2021, one contributor (the contributor) texted Santos and others to make a contribution to his campaign, providing billing information for two credit cards. In the days after he received the billing information, Santos allegedly used the credit card information to make numerous contributions to his campaign and affiliated political committees in amounts exceeding applicable contribution limits, without the contributor’s knowledge or authorization. To mask the true source of these contributions and thereby circumvent the applicable campaign contribution limits, Santos falsely identified the contributor for one of the charges as one of his relatives. In the following months, Santos allegedly repeatedly charged the contributor’s credit card without the contributor’s knowledge or authorization, attempting to make at least $44,800 in charges and repeatedly concealing the true source of funds by falsely listing the source of funds as Santos himself, his relatives, and other contributors. On one occasion, Santos charged $12,000 to the contributor’s credit card, ultimately transferring the vast majority of that money into Santos’s own personal bank account.
The case is currently scheduled for a status conference before Judge Seybert on Oct. 27. If convicted, he faces a mandatory minimum penalty of two years in prison for the aggravated identity theft counts and a maximum penalty of 20 years in prison for the other counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Assistant Director in Charge James Smith of the FBI New York Field Office, and Nassau County District Attorney Anne T. Donnelly made the announcement.
The FBI is investigating the case, with assistance from the Nassau County District Attorney’s Office.
Trial Attorneys Jacob Steiner and John Taddei of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise for the Eastern District of New York are prosecuting the case, with assistance from Paralegal Specialist Rachel Friedman. Former Trial Attorney Jolee Porter of the Criminal Division’s Public Integrity Section provided substantial contributions to the prosecution.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Congressman George Santos Charged with Conspiracy, Wire Fraud, False Statements, Falsification of Records, Aggravated Identity Theft, and Credit Card FraudRead the Press Release
CENTRAL ISLIP, NY – A 23-count superseding indictment was filed today in the United States District Court for the Eastern District of New York, charging George Anthony Devolder Santos, better known as “George Santos,” the United States Representative for the Third District of New York, with one count of conspiracy to commit offenses against the United States, two counts of wire fraud, two counts of making materially false statements to the Federal Election Commission (FEC), two counts of falsifying records submitted to obstruct the FEC, two counts of aggravated identity theft, and one count of access device fraud, in addition to the seven counts of wire fraud, three counts of money laundering, one count of theft of public funds, and two counts of making materially false statements to the United States House of Representatives that were charged in the original indictment. Santos is due back in federal court in Central Islip on October 27, 2023.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Anne T. Donnelly, Nassau County District Attorney, announced the superseding indictment.
“As alleged, Santos is charged with stealing people’s identities and making charges on his own donors’ credit cards without their authorization, lying to the FEC and, by extension, the public about the financial state of his campaign. Santos falsely inflated the campaign’s reported receipts with non-existent loans and contributions that were either fabricated or stolen” stated United States Attorney Peace. “This Office will relentlessly pursue criminal charges against anyone who uses the electoral process as an opportunity to defraud the public and our government institutions.”
“Santos allegedly led multiple additional fraudulent criminal schemes, lying to the American public in the process. The FBI is committed to upholding the laws of our electoral process. Anyone who attempts to violate the law as part of a political campaign will face punishment in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.
“The defendant - a Congressman - allegedly stole the identities of family members and used the credit card information of political contributors to fraudulently inflate his campaign coffers,” stated District Attorney Donnelly. “We thank our partners in the US Attorney’s Office and the FBI as we work together to root out public corruption on Long Island.”
As alleged in the superseding indictment, Santos, who was elected to Congress last November and sworn in as the U.S. Representative for New York’s Third Congressional District on January 7, 2023, engaged in two fraudulent schemes, in addition to the multiple fraudulent schemes alleged in the original indictment.
The Party Program Scheme
During the 2022 election cycle, Santos was a candidate for the United States House of Representatives in New York’s Third Congressional District. Nancy Marks, who pleaded guilty on October 5, 2023 to related conduct, was the treasurer for his principal congressional campaign committee, Devolder-Santos for Congress. During this election cycle, Santos and Marks conspired with one another to devise and execute a fraudulent scheme to obtain money for the campaign by submitting materially false reports to the FEC on behalf of the campaign, in which they inflated the campaign’s fundraising numbers for the purpose of misleading the FEC, a national party committee, and the public.
Specifically, the purpose of the scheme was to ensure that Santos and his campaign qualified for a program administered by the national party committee, pursuant to which the national party committee would provide financial and logistical support to Santos’s campaign. To qualify for the program, Santos had to demonstrate, among other things, that his congressional campaign had raised at least $250,000 from third-party contributors in a single quarter.To create the public appearance that his campaign had met that financial benchmark and was otherwise financially viable, Santos and Marks agreed to falsely report to the FEC that at least 10 family members of Santos and Marks had made significant financial contributions to the campaign, when Santos and Marks both knew that these individuals had neither made the reported contributions nor given authorization for their personal information to be included in such false public reports. In addition, understanding that the national party committee relied on FEC fundraising data to evaluate candidates’ qualification for the program, Santos and Marks agreed to falsely report to the FEC that Santos had loaned the campaign significant sums of money, when, in fact, Santos had not made the reported loans and, at the time the loans were reported, did not have the funds necessary to make such loans. These false reported loans included a $500,000 loan, when Santos had less than $8,000 in his personal and business bank accounts.
Through the execution of this scheme, Santos and Marks ensured that Santos met the necessary financial benchmarks to qualify for the program administered by the national party committee. As a result of qualifying for the program, the congressional campaign received financial support.
The Credit Card Fraud Scheme
In addition, between approximately December 2021 and August 2022, Santos devised and executed a fraudulent scheme to steal the personal identity and financial information of contributors to his campaign. He then charged contributors’ credit cards repeatedly, without their authorization. Because of these unauthorized transactions, funds were transferred to Santos’s campaign, to the campaigns of other candidates for elected office, and to his own bank account. To conceal the true source of these funds and to circumvent campaign contribution limits, Santos falsely represented that some of the campaign contributions were made by other persons, such as his relatives or associates, rather than the true cardholders. Santos did not have authorization to use their names in this way.
For example, in December 2021, one contributor (the “Contributor”) texted Santos and others to make a contribution to his campaign, providing billing information for two credit cards. In the days after he received the billing information, Santos used the credit card information to make numerous contributions to his campaign and affiliated political committees in amounts exceeding applicable contribution limits, without the Contributor’s knowledge or authorization. To mask the true source of these contributions and thereby circumvent the applicable campaign contribution limits, Santos falsely identified the contributor for one of the charges as one of his relatives. In the following months, Santos repeatedly charged the Contributor’s credit card without the Contributor’s knowledge or authorization, attempting to make at least $44,800 in charges and repeatedly concealing the true source of funds by falsely listing the source of funds as Santos himself, his relatives and other contributors. On one occasion, Santos charged $12,000 to the Contributor’s credit card, ultimately transferring the vast majority of that money into his personal bank account.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The government’s case is being handled by the Office’s Public Integrity Section, the Long Island Criminal Division, and the Justice Department Criminal Division’s Public Integrity Section. Assistant United States Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise, along with Trial Attorneys Jacob Steiner and John Taddei, are in charge of the prosecution with assistance from Paralegal Specialist Rachel Friedman. Former Trial Attorney Jolee Porter of the Criminal Division’s Public Integrity Section also provided substantial contributions to the prosecution.
The Defendant:
GEORGE ANTHONY DEVOLDER SANTOS
Age: 35
Washington, District of ColumbiaE.D.N.Y. Docket No. 23-CR-197 (JS)
Statement by United States Attorney Breon Peace on the Sentencing of Subway Mass Shooter Frank JamesRead the Press Release
Good afternoon, today, justice has been served.
During the morning rush hour on April 12th, 2022, Frank James unleashed a premeditated attack on unsuspecting New Yorkers he trapped in a subway car, firing 32 shots and seriously wounding 10 people. For those acts, Frank James was sentenced to:
10 concurrent sentences of life in prison, plus an additional 10-year consecutive sentence.
The daily lifeblood of New York City is in its transit system – it’s found in the subway cars that are responsible for safely transporting New Yorkers every single day. Frank James attempted to take that sense of safety away and inject fear and chaos into the heart of this City. While he found temporary success in his plot, due to the resilience of New Yorkers and our relentless pursuit of justice, he ultimately failed.
On that horrific morning, when New Yorkers left their homes and boarded the N train, they had no idea that they were entering a death trap that Frank James orchestrated. A trap that he had been planning to set for years during which he purchased smoke bombs, disguises, and guns. In the weeks leading up to the attack, he scouted the location for his attack and completed multiple practice runs. On the day of the attack, when the train was between stations, he put his evil plan into action. He set off a smoke bomb, causing his victims to flee to the opposite end of the subway car. They had nowhere else to run. Then the defendant fired at them 32 times. 32 times in a closed subway car. We can only imagine the terror the passengers in that car experienced. Each time he pulled the trigger on his handgun, he made the choice to try to take a life. And although fortunately no one died, sixteen (16) of those 32 bullets struck the bodies of the cornered, innocent victims.
The victims – not just those who were wounded physically, but also those who witnessed this horrific act, and others who put themselves at risk to help, will live with these traumatic events for the rest of their lives.
From the victim who saved another passenger’s life by applying a makeshift tourniquet, to the victim who nearly lost her unborn child, to the victim who was shot three times and miraculously lived—dozens of people’s lives will forever be negatively affected because of the defendant’s heartless acts of terror.
The impact and fear were felt beyond the direct victims in that subway car and station that morning, the defendant terrorized the city at large. Schools were on lockdown. Parents rushed to pick up their kids and make sure that they were safe. People feared taking the subway. No one knew whether there would be additional attacks. There was a city-wide manhunt for more than 24 hours, and the terror caused by the attack lingered until the defendant was caught. And today Frank James was held accountable.
I want to thank our law enforcement partners who helped us secure justice in this case: the FBI, the NYPD, and the entire New York Joint Terrorism Task Force. I also want to thank the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Metropolitan Transportation Authority which provided critical assistance along the way. The excellent and determined work and cooperation of these agencies led to the identification and apprehension of Frank James. Without the efforts of these agencies, we would not be standing here today.
I want to thank the outstanding prosecution team from my Office: Assistant United States Attorneys Sara Winik, Ellen Sise and Ian Richardson, paralegal specialist Magdalena Saint Surin, and the entire National Security & Cybercrime Section of my Office. And I want to express appreciation to Attorney General Garland, Deputy Attorney General Monaco and our colleagues in the National Security Division of the Department of Justice for their support during the investigation of the attack and through the duration of this case.
Finally, to the people on that N train and in that station that morning, I want to thank you. You helped each other get to safety and to medical care. Your efforts assisted law enforcement in quickly identifying the defendant. On a day when evil imperiled so many, you showed that this city is made of good people. That we look out for one another. You are the fabric of this city; you are resilient. And on a dark day of danger and fear, you showed strength and courage, you showed that you are the light.
Today’s sentence sends a clear message to any would-be terrorist: if you plan or commit an act of violence, this Office will aggressively pursue federal charges and prosecute you to the fullest extent of the law.
Now we will hear from FBI Special Agent in Charge Rob Kissane.
Pharmacy Owner Pleads Guilty to $25M Health Care Fraud SchemeRead the Press Release
A New York man pleaded guilty today to conspiring to defraud Medicare and Medicaid of more than $25 million for medically unnecessary prescriptions that were induced by kickbacks and bribes.
According to court documents, Dacheng Lu, aka Bruce Lu, 44, of Great Neck, was a part owner of 888 Pharmacy Inc. (888) and Huikang Pharmacy Inc. (Huikang). Between January 2015 and December 2022, Lu and his co-conspirators referred Medicare beneficiaries and Medicaid recipients to medical practices that prescribed medically unnecessary topical medications and pain patches, which 888 and Huikang billed to Medicare and Medicaid. In exchange for writing medically unnecessary prescriptions, Lu and his co-conspirators provided the medical practices kickbacks and bribes in the form of rent and office staff.
Lu pleaded guilty to conspiracy to commit health care fraud. He is scheduled to be sentenced on Jan. 24, 2024, and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.
HHS-OIG and the FBI are investigating the case.
Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Frank James Sentenced to Life in Prison for Subway Mass ShootingRead the Press Release
Frank James, 62, of Milwaukee, Wisconsin, was sentenced today by U.S. District Judge William F. Kuntz II to 10 concurrent life sentences in prison, plus 10 years to run consecutively for shooting 10 people during an attack on the New York City subway in Sunset Park, Brooklyn, on April 12, 2022. James previously pleaded guilty to all 11 counts of a superseding indictment, which included 10 counts of committing a terrorist attack or other violence against a mass transportation vehicle – one count for each gunshot victim – and one count of discharging a firearm in furtherance of his violent attack.
“Nothing can undo the damage that Frank James’s mass shooting inflicted on the 10 victims who were shot or the dozens more who suffered other injuries, but this sentence ensures that he will spend the rest of his life in prison for the devastation he caused,” said Attorney General Merrick B. Garland. “This sentence also makes clear that the Justice Department has no tolerance for crimes that terrorize our communities and will ensure accountability for those who perpetrate them.”
“Whenever domestic violent extremists violate our laws and commit heinous acts of violence against the American public, the FBI will work hand in hand with our law enforcement partners at all levels to pursue justice for the victims and hold criminals accountable for their abhorrent actions,” said FBI Director Christopher Wray. “The public we serve deserves nothing less.”
“In an act of cold-blooded terrorism, this defendant shot 32 rounds at defenseless victims trapped in a subway car during their rush hour commute,” said Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). “ATF agents immediately responded to the scene of the shooting and joined their state, local and federal law enforcement partners in the investigation. When a gun was recovered on the subway platform, ATF conducted an urgent trace of the crime gun to identify the purchaser, ultimately leading to the name of the shooter. Today’s sentence not only reflects the heinousness of the crimes committed, but it reflects the extraordinary work of all the law enforcement and prosecutors involved. It takes the best of the best to catch the worst of the worst.”
“Today’s sentence delivered the necessary penalty for Frank James who callously carried out a terroristic mass shooting on a crowded subway car, intentionally attempting to kill innocent people, and spilling much blood,” said U.S. Attorney Breon Peace for the Eastern District of New York. “He wounded 10 victims in his planned out attack and affected the lives of many more. Every one of the victims who experienced that horror feared that they would never see their children or loved ones again. It is appropriate that the defendant will never know freedom again and will spend the rest of his life in prison so that no one can be harmed further by him. I hope that this sentence brings some closure to the many victims of this violent attack and brings comfort to the city at large in knowing that justice was done.”
During rush hour on the morning of April 12, 2022, James used a Glock 17 pistol he legally purchased to conduct a mass shooting on an N subway train in Brooklyn. James planned his act of terror for years – purchasing smoke bombs, disguises, firearms, and ammunition. He scouted the location for his attack and completed multiple practice runs. As part of his attack, James, disguised in an orange reflective jacket and yellow hard hat to look like a Metropolitan Transportation Authority (MTA) employee, set off a smoke-bomb in a subway car before opening fire on his captive victims. Panicked passengers ran to the far end of the subway car, allowing James to shoot at his victims more easily. When the defendant started shooting, the train was between stations and then temporarily stalled, leaving victims trapped. In total, 10 victims were struck by 16 bullets fired by the defendant. Dozens more suffered from smoke inhalation and other mental and physical injuries due to the defendant’s attack. James then fled the scene of the attack, changing his clothing frequently to evade detection while law enforcement engaged in a 36-hour manhunt to find him and bring him to justice.
At some point after the shooting, James purchased a burner phone which he used to follow the coverage of his attack while hiding from law enforcement. For example, James watched 31 videos of news reports about his subway shooting. He also watched a James Bond chase scene from the movie “No Time to Die” 10 times after the attack. Finally, James turned himself in by calling the NYPD crime stoppers hotline on April 13, 2022, the day after the mass shooting.
The New York Joint Terrorism Task Force investigated the case, with valuable assistance provided by the Metropolitan Transportation Authority (MTA) and the ATF.
Assistant U.S. Attorneys Sara K. Winik and Ellen H. Sise for the Eastern District of New York are prosecuting the case with valuable assistance provided by the National Security Division’s Counterterrorism Section.
Frank James Sentenced to Life in Prison for Subway Mass ShootingRead the Press Release
Frank James was sentenced today by United States District Judge William F. Kuntz, II to 10 concurrent life sentences in prison, plus 10 years to run consecutively for shooting 10 people during an attack on the New York City subway in Sunset Park, Brooklyn, on April 12, 2022. James previously pleaded guilty to all 11 counts of a superseding indictment, which included 10 counts of committing a terrorist attack or other violence against a mass transportation vehicle—one count for each gunshot victim—and one count of discharging a firearm in furtherance of his violent attack.
Merrick B. Garland, United States Attorney General, Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today’s life sentence delivered the necessary penalty for Frank James, who callously carried out a mass shooting on a crowded subway car, attempting to kill innocent people, and spilling much blood. He wounded 10 victims in his calculated attack and terrorized many more,” stated United States Attorney Peace. “I hope that this sentence brings some closure to the many victims of this violent attack and comfort to the city at large in knowing that justice was done.”
Mr. Peace praised the exceptional efforts of the New York Joint Terrorism Task Force for the investigation and speedy apprehension of the defendant. He also extended his appreciation to the Metropolitan Transportation Authority (MTA) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives for their assistance.
“Today, Frank James was rightfully sentenced for his deliberate and calculated act of terror against our city. He aimed to kill innocent people, who were simply going about their daily lives amid the morning rush. It is because of the dogged determination and vigilance of the investigators of the FBI New York’s Joint Terrorism Task force that James was brought to justice and is facing the consequences he rightfully deserves,” stated FBI Assistant Director-in-Charge Smith.
“Today’s outcome hopefully brings solace to the many victims of Mr. James, who carried out a horrifying act of terrorism in a cold, calculated, premeditated manner,” stated NYPD Commissioner Caban. “From the moment Mr. James committed this appalling crime, we and our law enforcement partners shrank his world until he had nowhere to turn – and the people of New York City worked alongside us. In addition to our colleagues at the FBI, the ATF, the U.S. Marshals Service, and the U.S. Attorney’s Office for the Eastern District of New York, I thank and commend New Yorkers for their vigilance in helping bring this unseemly episode to a just conclusion.”
During rush hour on the morning of April 12, 2022, James used a Glock 17 pistol he legally purchased to conduct a mass shooting on an N subway train in Brooklyn. James planned his act of terror for years—purchasing smoke bombs, disguises, firearms, and ammunition. He scouted the location for his attack and completed multiple practice runs. As part of his attack, James, disguised in an orange reflective jacket and yellow hard hat to look like an MTA employee, set off a smoke-bomb in a subway car before opening fire on his captive victims. Panicked passengers ran to the far end of the subway car, allowing James to shoot at his victims more easily. When the defendant started shooting, the train was between stations and then temporarily stalled, leaving victims trapped. In total, the defendant fired at least 32 bullets and 10 victims were struck by his gunfire. Dozens more suffered from smoke inhalation and other mental and physical injuries due to the defendant’s attack. James then fled the scene of the attack, changing his clothing frequently to evade detection while law enforcement engaged in a 36-hour manhunt to find him and bring him to justice.
At some point after the shooting, James purchased a burner phone which he used to follow the coverage of his attack while hiding from law enforcement. For example, James watched 31 videos of news reports about his subway shooting. He also watched a James Bond chase scene from the movie “No Time to Die” 10 times after the attack. Finally, James turned himself in by calling the NYPD Crime Stoppers hotline on April 13, 2022, the day after the mass shooting.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant U.S. Attorneys Sara K. Winik and Ellen H. Sise are in charge of the prosecution, with assistance from Paralegal Specialist Magdalena St. Surin and the Justice Department’s National Security Division’s Counterterrorism Section.
The Defendant:
FRANK JAMES
Age: 64
Milwaukee, WisconsinE.D.N.Y. Docket No. 22-CR-214 (WFK)
Congressional Campaign Treasurer Pleads Guilty to Conspiring with Congressional Candidate in Campaign Finance Fraud SchemeRead the Press Release
The former treasurer for a candidate for the U.S. House of Representatives pleaded guilty today to conspiring with a congressional candidate to commit wire fraud, make materially false statements, obstruct the administration of the Federal Election Commission (FEC), and commit aggravated identity theft.
According to court documents, Nancy Marks, 58, of New York, was the treasurer for the principal congressional campaign committee of a candidate for the U.S. House of Representatives during the 2022 election cycle in New York’s Third Congressional District. During this election cycle, Marks and the candidate devised and executed a fraudulent scheme to obtain money for the campaign by submitting materially false reports to the FEC on behalf of the campaign in which they inflated the campaign’s fundraising numbers for the purpose of misleading the FEC, a national party committee, and the public.
Specifically, the purpose of the scheme was to ensure that the candidate and his campaign qualified for a program that the national party committee administered, pursuant to which the national party committee would provide financial and logistical support to the candidate and his campaign committee. To qualify for the program, the candidate had to demonstrate, among other things, that his congressional campaign had raised at least $250,000 from third-party contributors in a single quarter.
To meet this financial benchmark and to further demonstrate to the national party committee that the congressional candidate’s campaign was financially viable, Marks and the candidate agreed to falsely report to the FEC that at least 10 family members of Marks and the candidate had made contributions to the campaign, when Marks and the candidate both knew that these individuals had not made the reported contributions. In addition, Marks and the candidate agreed to falsely report to the FEC that the congressional candidate had loaned the campaign significant sums of money, including in one instance a $500,000 loan, when, in fact, the congressional candidate had not made the reported loans and, at the time the loans were reported, did not have the funds necessary to make such loans.
Through the execution of this scheme, Marks and the candidate ensured that the candidate met the necessary financial benchmarks to qualify for the program that the national party committee administered. As a result of qualifying for the program, the congressional campaign received financial support.
Marks is scheduled to be sentenced on April 12, 2024, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.
The FBI is investigating the case, with assistance from the Nassau County District Attorney’s Office.
Trial Attorneys Jacob Steiner and John Taddei of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise for the Eastern District of New York are prosecuting the case, with assistance from Paralegal Specialist Rachel Friedman. Former Trial Attorney Jolee Porter of the Criminal Division’s Public Integrity Section provided substantial contributions to the prosecution.
Congressional Campaign Treasurer Pleads Guilty to Conspiring with a Congressional Candidate to DefraudRead the Press Release
CENTRAL ISLIP, NY – Earlier today, at the federal courthouse in Central Islip, Nancy Marks, the former treasurer for a candidate for the United States House of Representatives, pleaded guilty to conspiring with a congressional candidate to: (a) commit wire fraud; (b) make materially false statements; (c) obstruct the administration of the Federal Election Commission (FEC); and (d) commit aggravated identity theft. Today’s proceeding was held before United States District Judge Joanna Seybert. When sentenced, Marks faces up to five years in prison, as well as restitution and a fine.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“With today’s guilty plea, Marks has admitted that she conspired with a congressional candidate to lie to the FEC and, by extension, the public about the financial state of the candidate’s campaign for New York’s Third Congressional District, falsely inflating the campaign’s reported receipts with non-existent contributions and loans,” stated United States Attorney Peace. “My Office will continue holding accountable those who perpetrate a fraud on the public and the institutions that help maintain transparency in the electoral process.”
Mr. Peace expressed his thanks to the Nassau County District Attorney’s Office for their assistance with the investigation.
“Marks engaged in criminal conduct intended to deceive and defraud the American public. This guilty plea holds her responsible for those various fraudulent schemes and brazen misrepresentations,” stated FBI Assistant Director-in-Charge Smith. “The FBI will continue to investigate all allegations of campaign finance abuse to ensure openness, fairness, and transparency in our election process.”
According to court filings and facts presented during the plea proceeding, Marks was the treasurer for the principal congressional campaign committee of a candidate for the United States House of Representatives during the 2022 election cycle in New York’s Third Congressional District (the “Candidate”). During this election cycle, Marks and the candidate devised and executed a fraudulent scheme to obtain money for the campaign by submitting materially false reports to the FEC on behalf of the campaign in which they inflated the campaign’s fundraising numbers for the purpose of misleading the FEC, a national party committee, and the public.
Specifically, the purpose of the scheme was to ensure that the Candidate and his campaign qualified for a program administered by the national party committee, pursuant to which the national party committee would provide financial and logistical support to the Candidate and his campaign committee. To qualify for the program, the Candidate had to demonstrate, among other things, that his congressional campaign had raised at least $250,000 from third-party contributors in a single quarter.
To meet that financial benchmark and to further demonstrate to the national party committee that the congressional candidate’s campaign was financially viable, Marks and the Candidate agreed to falsely report to the FEC that at least 10 family members of Marks and the Candidate had made contributions to the campaign, when Marks and the Candidate both knew that these individuals had not made the reported contributions. In addition, Marks and the Candidate agreed to falsely report to the FEC that the congressional candidate had loaned the campaign significant sums of money, including in one instance a $500,000 loan, when, in fact, the congressional candidate had not made the reported loans and, at the time the loans were reported, did not have the funds necessary to make such loans.
Through the execution of this scheme, Marks and the Candidate ensured that the Candidate met the necessary financial benchmarks to qualify for the program administered by the national party committee. As a result of qualifying for the program, the congressional campaign received financial support.
The government’s case is being handled by the Office’s Public Integrity Section, the Long Island Criminal Division, and the Criminal Division’s Public Integrity Section. Assistant United States Attorneys Ryan Harris, Anthony Bagnuola, and Laura Zuckerwise, along with Trial Attorneys Jacob Steiner and John Taddei, are in charge of the prosecution with assistance from Paralegal Specialist Rachel Friedman. Former Trial Attorney Jolee Porter of the Criminal Division’s Public Integrity Section also provided substantial contributions to the prosecution.
The Defendant:
NANCY MARKS
Age: 58
Shirley, New YorkE.D.N.Y. Docket No. 23-CR-197 (JS)
13 Members and Associates of the “Route Boys” Convicted of Drug Trafficking and Firearms OffensesRead the Press Release
Earlier today, in federal court in Central Islip, Eric Nunez pleaded guilty to conspiracy to distribute controlled substances and use of firearms in furtherance of drug trafficking activity. Nunez is the last of 13 defendants to plead guilty before United States District Judge Gary R. Brown in connection with a 22-count superseding indictment with charges involving drug distribution, use of firearms, pharmacy burglaries, and ATM thefts.
The defendants are members and associates of a burglary and drug trafficking organization known as the “Route Boys.” The Route Boys committed burglaries of pharmacies and convenience stores in Nassau, Suffolk, Brooklyn, Queens, Westchester and Rockland Counties, as well as in New Jersey and Connecticut from 2020 through June 2022, when they were arrested.
Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.
“With today’s guilty plea, and a dozen others previously, the criminal organization known as the “Route Boys” has been routed for their crime spree targeting local businesses throughout the Tri-State area, distributing drugs stolen from pharmacies and using firearms in furtherance of drug trafficking,” stated United States Attorney Peace. “This Office is working tirelessly with our law enforcement partners to protect local businesses and hold accountable those who endanger our communities with dangerous drugs and guns.”
Mr. Peace thanked the New York City Police Department, Nassau County Police Department, Suffolk County Police Department, Westchester Safe Streets Task Force, Drug Enforcement Administration, Kings County District Attorney’s Office, Queens County District Attorney’s Office, Nassau County District Attorney’s Office, and Suffolk County District Attorney’s Office for their assistance with the investigation.
As alleged in the superseding indictment and other court filings, the Route Boys began committing burglaries in late 2020, breaking into convenience stores, check-cashing businesses, laundromats and restaurants, stealing primarily cash and tobacco products. In addition, the organization often stole free-standing ATMs, forcing them open and stealing the cash from inside the machine, netting them tens of thousands of dollars. They then began targeting small “mom-and-pop” pharmacies throughout the Tri-State area by smashing through windows and stealing controlled substances such as oxycodone and promethazine-codeine cough syrup. They sold these stolen pharmaceuticals, often by advertising on social media immediately after a night of burglaries.
When sentenced, Carlos Acevedo, Ramon Collado, Naresh Deonarrain, the crew’s founder Jason Liriano, Charlie Maisonet, Cavier Nedrick, Eric Nunez, Jose Rosado, Alberto Santiago, and Jeffrey Vargas each face up to life imprisonment. Jonathan Santiago faces a sentence of up to 20 years’ imprisonment, Luis Cerda faces a sentence of up to 10 years’ imprisonment, and Devin Lopez-Dominguez faces a sentence of up to 5 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Samantha Alessi and Andrew Wenzel are in charge of the prosecution.
The Defendants:
CARLOS ACEVEDO
Age: 26
Brooklyn, New YorkLUIS CERDA
Age: 33
Queens, New YorkRAMON COLLADO
Age: 26
Brooklyn, New YorkNARESH DEONARRAIN
Age: 27
Brooklyn, New YorkJASON LIRIANO
Age: 25
Brooklyn, New YorkDEVIN LOPEZ-DOMINGUEZ
Age: 22
Brooklyn, New YorkCHARLIE MAISONET
Age: 21
Brooklyn, New YorkCAVIER NEDRICK
Age: 26
Hauppauge, New YorkERIC NUNEZ
Age: 26
Brooklyn, New YorkJOSE ROSADO
Age: 30
Queens, New YorkALBERTO SANTIAGO
Age: 27
Queens, New YorkJONATHAN SANTIAGO
Age: 24
Franklin Square, New YorkJEFFREY VARGAS
Age: 23
Brooklyn, New YorkE.D.N.Y. Docket No. 21-451 (S-3) (GRB)
New York City Correction Officer Charged with Salary and Overtime FraudRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging New York City Department of Correction (DOC) officer James Internicola with federal program fraud. Internicola was arrested this morning and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Marcia M. Henry.
Internicola has been a correction officer with the DOC since January 1996. In 2019, he began working at a warehouse at Rikers Island which manages supplies for the jail facility, as well as facility garbage and recycling. Currently, Internicola is primarily responsible for all recycling operations at Rikers Island.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, New York Field Office (FBI), and Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), announced the charges.
“As alleged, the defendant defrauded the people of New York City and the New York City Department of Correction by claiming to work significant amounts of hours, including overtime, that he did not actually work,” stated United States Attorney Peace. “Instead of being at work, the defendant was often at home or even on vacation. Correction officers who steal tax dollars by fraudulently obtaining compensation should take note of today’s arrest and know that this Office is working with our law enforcement partners to root out corruption at Rikers Island.”
“Internicola’s alleged crime taints every law enforcement officer who takes an oath to uphold the law," stated FBI Assistant Director-in-Charge Smith. “The FBI maintains a zero-tolerance policy for individuals who commit fraud and steal from law abiding taxpayers.”
“This Correction Officer, as charged, stole over $171,000 from the City by falsely claiming he was at work on Rikers Island, including for overtime hours, when in fact he was vacationing in Aruba and the Jersey Shore, or at home on Staten Island. His false timesheets allegedly included 2,250 hours of time he did not work, a staggering figure. I thank the U.S. Attorney’s Office for the Eastern District of New York for its commitment to protect City resources – including salaries paid to City workers – from theft and abuse,” stated DOI Commissioner Strauber.
According to the complaint, Internicola fraudulently obtained more than $171,000 in salary and overtime pay by lying about the hours he worked from at least July 2021 to January 2023. During this time period, Internicola claimed to work large amounts of overtime nearly every week. In fact, based on license plate reader data, E-Z pass toll records and cell site location information, Internicola frequently showed up to work more than two hours late and left work several hours early. In many instances, Internicola claimed to be at work when he actually never showed up to Rikers Island at all, including when he was at his home on Staten Island, visiting the Jersey Shore or vacationing in Aruba. In total, Internicola claimed to have worked more than 2,250 hours in a period of approximately 18 months and he fraudulently received the equivalent of more than a year of his base salary.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 10 years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Philip Pilmar and Andrew D. Grubin are in charge of the prosecution.
The Defendant:
JAMES INTERNICOLA
Age: 56
Staten Island, NYE.D.N.Y. Docket No. 23-MJ-867
United States Facilitates Court-Ordered Sale of Sayville Motor Lodge to New OwnerRead the Press Release
The United States yesterday completed the sale of the Sayville Motor Lodge in Sayville, Long Island to a company that is partially owned by a principal of a neighboring business with longstanding ties to the community. By Order entered on September 11, 2023, United States District Judge Joanna Seybert approved today’s sale of the Sayville Motor Lodge for the sum of $2 million, with the payment out of the sale’s proceeds to prior lenders on the property. The remaining proceeds are earmarked for forfeiture to the United States government, which will enable the office to seek their use in compensating the victims of the charged conduct through the Department of Justice’s remission procedures.
The Sayville Motor Lodge was a drug-involved property at the center of a sex trafficking conspiracy based on Long Island. In November 2022, an indictment was unsealed in federal court in Central Islip charging Timothy Bullen, Michael Johnson, Narendarakuma Dadarwala, his wife Shardaben Dadarwala, their son Jigar Dadarwala, Ashokbhai Patel, and Himanshu, Inc. d/b/a Sayville Motor Lodge with sex trafficking conspiracy. The Dadarwalas, Patel, and Himanshu, Inc. were also charged with managing a drug premises, and Narendarakuma Dadarwala was charged with distribution of proceeds of prostitution and narcotics businesses. Charges against the defendants are pending. There is no trial date at the present time.
Breon Peace, United States Attorney for the Eastern District of New York, and Vincent F. DeMarco, United States Marshal for the Eastern District of New York, announced the sale of the property.
“As a result of this sale, the Sayville Motor Lodge is no longer ground zero of an insidious money-maker for prostitution and narcotics trafficking, and a blight on the surrounding community,” stated United States Attorney Peace. “Instead, the property will be repurposed by its new owner for the benefit of the residents of Long Island.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, the Suffolk County Police Department, the Suffolk County District Attorney’s Office, the Suffolk County Sheriff’s Office, the Nassau County District Attorney’s Office, United States Customs and Border Protection, and Homeland Security Investigations for their work on the case.
“The closing of the sale of this property yesterday is a positive step that will increase public safety in this community,” stated United States Marshal DeMarco.
The Underlying Sex Trafficking Scheme
As set forth in court filings, the Dadarwalas owned and operated the Sayville Motor Lodge since approximately 1984. They resided and worked at the motel. From 2017 to 2019, Ashokbhai Patel was employed and also lived there. The Dadarwalas and Patel facilitated the criminal activity at the Sayville Motor Lodge and profited from the prostitution and narcotics activity that routinely took place there. They were aware that women engaged in prostitution, including at least one minor trafficking victim. They warned traffickers and women engaged in prostitution when law enforcement was on the premises and observed traffickers inflict physical violence on their victims and customers.
From approximately 2014 until 2018, Bullen allegedly operated his sex trafficking business out of the Sayville Motor Lodge, in coordination with the Dadarwalas and Patel; and from approximately 2018 until 2020, Johnson allegedly operated his sex trafficking business out of the Sayville Motor Lodge, in coordination with the Dadarwalas and Patel. Bullen and Johnson trafficked several women out of the motel, including a minor, and routinely subjected the women who worked for them to mental and physical violence. In furtherance of their respective operations, Bullen and Johnson kept the women who worked for them addicted to drugs and introduced them to prostitution in exchange for drugs.
In addition, from 2014 to the present, the Dadarwalas, Patel, and Himanshu, Inc. profited from the narcotics trafficking that was conducted openly on Sayville Motor Lodge property. The defendants allowed customers to freely use drugs, including heroin, cocaine and crack cocaine, in plain view and in motel rooms. Much like the traffickers, drug dealers paid the Sayville defendants for the privilege of selling drugs at the Sayville Motor Lodge.
The Government Obtains Order To Restrain The Sayville Motor Lodge
In connection with the indictment, the government sought to forfeit the Sayville Motor Lodge. In addition, to ensure the property was preserved for forfeiture, the United States obtained an order restraining the defendants from transferring, encumbering or operating the Sayville Motor Lodge in violation of law.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Catherine M. Mirabile, Samantha S. Alessi and Brian Morris are in charge of the prosecution.
The Defendants:
TIMOTHY BULLEN, also known as “Trouble,” “T” and “Tiervoni,”
Age: 36
Bay Shore, New YorkMICHAEL JOHNSON, also known as “Wise”
Age: 34
Selbyville, DelawareJIGAR DADARWALA, also known as “Cobra”
Age: 45
Sayville, New YorkNARENDARAKUMA DADARWALA, also known as “Naren,” “Pa” and “Dad”
Age: 77
Sayville, New YorkSHARDABEN DADARWALA, also known as “Sharda,” “Ma” and “Mom”
Age: 70
Sayville, New YorkASHOKBHAI PATEL, also known as “BG”
Age: 59
Omaha, NebraskaHIMANSHU, INC. d/b/a Sayville Motor Lodge
E.D.N.Y. Docket No. 22-CR-494 (JS)
Genomic Health Inc. to Pay $32.5 Million to Resolve Allegations Relating to the Submission of False Claims for Genomic Diagnostic TestsRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, and Naomi D. Gruchacz, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of the Inspector General, New York Region (HHS-OIG) announced that the United States has reached a settlement with Genomic Health, Inc. (GHI) to resolve allegations that it violated the False Claims Act in an alleged nationwide scheme to improperly bill Medicare for laboratory tests known as “Oncotype DX®.” Under the terms of the settlement, GHI will pay $32.5 million for losses caused by GHI’s submission of false claims to the Medicare Program.
“This settlement rightly requires the payment of double damages caused by delayed tests for cancer patients for no reason other than to circumvent a Medicare requirement and allow improper payment to GHI,” stated United States Attorney Peace. “We will continue to enforce Medicare rules to protect the program and its vital role in our health care system, especially for those suffering from the ravages of cancer.”
Mr. Peace expressed his gratitude for the support of the United States Department of Health and Human Services for their assistance in investigating these important claims.
“Health care providers that unnecessarily delay services to evade Medicare requirements put their own profits over the well-being of vulnerable patients,” stated HHS-OIG Special Agent-in-Charge Gruchacz. “With our law enforcement partners, HHS-OIG is committed to investigating potentially fraudulent billing that can compromise patient well-being and the integrity of our federal health care programs.”
GHI is a Delaware corporation headquartered in Redwood City, California. GHI is a provider of genomic-based clinical diagnostic tests. Its principal test, Oncotype DX®, has been used for patients diagnosed with breast, colon and prostate cancer. GHI was acquired by Exact Sciences Corporation (“Exact”) in November 2019 and is a wholly-owned subsidiary of Exact.
The United States contends that GHI perpetrated a scheme to evade Medicare regulations when submitting claims to the Medicare Program for its test to circumvent Medicare’s 14-Day Rule (which establishes which entity may bill Medicare for certain laboratory services). During the time period covered by the settlement, Medicare’s 14-Day Rule prohibited laboratories from separately billing Medicare for certain tests if a physician ordered the test within 14 days of the patient’s discharge from a hospital stay either in an outpatient or inpatient setting. Such claims were required to be submitted by the hospital. However, if the test was performed more than 14 days after discharge, then Medicare’s 14-Day Rule permitted laboratories to bill Medicare directly for the test. The United States contends that GHI perpetrated its scheme in four ways:
- GHI sought direct reimbursement from the Medicare Program for claims on behalf of Medicare beneficiaries, when Oncotype DX® tests were ordered and submitted for testing within 14 days after an inpatient discharge. This caused the Medicare Program to incur additional costs beyond what it would have otherwise paid.
- GHI sought direct reimbursement from the Medicare Program for Oncotype DX® tests ordered within 14 days of a beneficiary’s out-patient procedure.
- GHI conspired with and encouraged hospitals and physicians to cancel and reorder Oncotype DX® tests and failed to discourage providers who ordered tests within 14 days from canceling and reordering the tests after the 14-day time period had elapsed.
- GHI failed to send timely invoices to hospitals for laboratory services that fell under the 14-Day Rule and instead wrote off the unpaid fees for laboratory services, thereby violating the Anti-Kickback Statute.
The civil settlement includes the resolution of two actions brought under the qui tam or whistleblower provisions of the False Claims Act against GHI. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The relator share from the proceeds of the federal settlement in this case will be $5,687,500. The qui tam cases are captioned United States ex rel. Caughron v. Genomic Health, Inc., Civil Action No. 16-CV-4038 (E.D.N.Y) and United States ex rel. Doe v. Genomic Health, Inc., et al., Civil Action No. 17-CV-4460 (E.D.N.Y.).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The government’s case was handled by former Assistant U.S. Attorney Deborah B. Zwany and Assistant U.S. Attorney Anjna Kapoor with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell, Paralegal Specialist Loan Ngyuen, and Sanjay Bhambhani, Senior Trial Counsel, Fraud Section, Commercial Litigation Branch. The Office of Inspector General at the Department of Health and Human Services assisted in the investigation of these cases.
Genomic Health Inc. Agrees to Pay $32.5 Million to Resolve Allegations Relating to the Submission of False Claims for Genomic Diagnostic TestsRead the Press Release
Genomic Health, Inc. (GHI), a Delaware corporation headquartered in Redwood City, California, has agreed to pay $32.5 million to resolve allegations that it violated the False Claims Act by engaging in a nationwide scheme to improperly bill Medicare for certain laboratory tests used to diagnose and treat cancer patients. GHI is a wholly owned subsidiary of Exact Sciences Corporation, which acquired GHI in November 2019.
GHI provides genomic-based clinical diagnostic tests. Its principal test, Oncotype DX®, is used for patients diagnosed with breast, colon and prostate cancer. The United States alleged that GHI perpetrated a scheme to evade Medicare’s 14-Day Rule, which governs the billing of genomic laboratory tests like Oncotype DX®.
During some or all of the time period covered by the settlement, Medicare’s 14-Day Rule prohibited laboratories from separately billing Medicare for covered tests if a physician ordered the test within 14 days of the patient’s discharge from a hospital stay in an inpatient or outpatient setting. For inpatient beneficiaries, such tests were covered under a lump-sum payment hospitals receive from the Medicare Program called the Diagnosis-Related Group (DRG) payment. For outpatient beneficiaries, Medicare’s 14-day Rule required (for most of the relevant time) tests ordered within 14 days of the patient’s discharge to be billed to the hospital but the hospital could then seek reimbursement from Medicare. However, if the test was performed more than 14 days after discharge from a hospital stay either in an inpatient or outpatient setting, then Medicare’s 14-Day Rule permitted laboratories to bill Medicare directly for the test. The United States contends that GHI improperly manipulated the 14-Day Rule in four ways:
- GHI sought direct reimbursement from the Medicare Program for claims on behalf of Medicare beneficiaries, when Oncotype DX® tests were ordered and submitted for testing within 14 days after an inpatient discharge. By submitting separate claims for these tests, GHI received direct payment for tests that should have been covered as part of the DRG payment to the hospital.
- GHI sought direct reimbursement from the Medicare Program for Oncotype DX® tests ordered within 14 days of a beneficiary’s outpatient procedure. By submitting separate claims for these tests, GHI received direct payment from Medicare for tests that should have been billed to the hospital.
- GHI conspired with and encouraged hospitals and physicians to cancel and reorder Oncotype DX® tests and failed to discourage providers who ordered tests within 14 days from canceling and reordering the tests after the 14-day time period had elapsed.
- GHI failed to send timely invoices to hospitals for laboratory services that fell under the 14 Day Rule and instead wrote off the unpaid fees for laboratory services, thereby violating the Anti-Kickback Statute.
“Participants in federal health care programs must comply with applicable rules when providing and billing for their services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will use the tools at its disposal to prevent companies from manipulating these programs for their own monetary benefit.”
“This settlement rightly requires the payment of double damages caused by delayed tests for cancer patients for no reason other than to circumvent a Medicare requirement and allow improper payment to GHI,” said U.S. Attorney Breon Peace for the Eastern District of New York. “We will continue to enforce Medicare rules to protect the program and its vital role in our health care system, especially for those suffering from the ravages of cancer.”
“Health care providers that unnecessarily delay services to evade Medicare requirements put their own profits over the well-being of vulnerable patients,” said Special Agent in Charge Naomi D. Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “With our law enforcement partners, HHS-OIG is committed to investigating potentially fraudulent billing that can compromise patient well-being and the integrity of our federal health care programs.”
The civil settlement includes the resolution of allegations brought in two separate actions filed against GHI under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, private parties can file an action on behalf of the United States and receive a portion of any recovery. The relator’s share from the proceeds of the settlement in this case will be $5,687,500. The qui tam cases are captioned United States ex rel. Caughron v. Genomic Health, Inc., Civil Action No. 16-CV-4038 (EDNY) and United States ex rel. Doe v. Genomic Health, Inc., et al., Civil Action No. 17-CV-4460 (EDNY).
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).
The cases were handled by former Assistant U.S. Attorney Deborah B. Zwany and Assistant U.S. Attorney Anjna Kapoor for the Eastern District of New York and monitored by Senior Trial Counsel Sanjay M. Bhambhani of the Civil Division’s Commercial Litigation Branch. The HHS-OIG and the FBI assisted in the investigation of these cases.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Settlement